In an initiative to make affordable financing more accessible to small business owners, the US Small Business Administration (SBA) has reduced upfront guarantee fees from 2% to 0% on loans of $150,000 and under. With a potential savings of $2550, that’s big news for small business owners looking for affordable loans to establish or grow their business this year!
Most Common Uses for Smaller SBA 7(a) Loans
For many small businesses just starting out or expanding, a loan of this size is plenty to get them going. The most common purposes for SBA 7(a) loans of $150,000 and below are:
- Working Capital
- Equipment Purchases
- Leasehold Improvements
- Purchase a small business condominium office
If your needs fit within this loan amount, you could also be eligible for another money/time-saving program, the SLA program. This program was designed to speed up the application process for what they call “small-dollar” SBA 7(a) loans (up to $350,000) by allowing lenders to process and approve loans according to a credit scoring system developed by the SBA. If your business is in a transitional period and capital needs are urgent, this program could be a lifesaver.
As the US Small Business Administration (SBA) scrambles to drum up new ways to put more loans in the hands of small(er) businesses, 2014 seems to be a good year to borrow- especially for businesses seeking “small-dollar” loans.
Are you starting a business this year? What do you think of the SBA’s small loan initiatives? Do they support your own business needs?
About Bruce Hurta
Bruce Hurta is an SBA real estate loan expert, lender, and public speaker committed to helping small business owners achieve affordable financing to build and grow their business. As an SBA loan expert, Bruce helps Houston business owners finance owner-user commercial real estate with the SBA 504 loans and SBA 7(a) loans. He also works with business owners looking to buy, build or grow a business. Using the flexible terms of the SBA 7(a) loan program, Bruce can help business owners purchase an established business or franchise, finance start-up costs or fund expansion of an existing business. With 20 years of SBA loan experience, Bruce is the trusted expert in Houston small business loans and SBA financing. He was the 2013 president of the Houston Association of Government Guaranteed Lenders (HAGGL), the official trade organization for over 300 SBA lenders in the Houston 32-county SBA district, and maintains an active role in the organization today.