Historical Facts
- The SBA programs have helped nearly 20 million small businesses, both directly and indirectly since 1953.
- The SBA currently has a loan portfolio of nearly 219,000 outstanding loans worth more than $45 Billion.
- From 1991-2000, the SBA helped almost 435,000 businesses get their start with more than $94.6 Billion in loans – more money than in the entire history of the agency before 1991.
- In 2005, the SBA backed more than $12.3 Billion in loans to small businesses.
- SBA continues to branch out, expanding its funding programs to increase business participation by women, minorities, and armed forces veterans.
Loan Programs Available for Franchises
There are three primary loan options to fund your franchise:
Basic 7(a) Loan Program
The Basic 7(a) Loan is the “primary business loan program to help qualified small businesses obtain financing when they might not be eligible for business loans through normal lending channels. It is also the agency’s most flexible business loan program, since financing under this program can be guaranteed for a variety of general business purposes.”“Loan proceeds can be used for most sound business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets.”
Delivered through: commercial lending institutions
>> Source: Small Business Administration website, Financing, SBA Loan Programs
Microloan Program
Designed for “small businesses and not-for-profit child-care centers needing small-scale financing and technical assistance for start-up or expansion. This program provides short-term loans of up to $35,000 for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. Proceeds cannot be used to pay existing debts or to purchase real estate. The SBA makes or guarantees a loan to an intermediary, who in turn, makes the microloan to the applicant. These organizations also provide management and technical assistance. The loans are not guaranteed by the SBA. The microloan program is available in selected locations in most states.”Delivered through: specially designated intermediary lenders (nonprofit organizations with experience in lending and in technical assistance).
>> Source: Small Business Administration website, Financing, SBA Loan Programs
Loan Prequalification Program
“Allows business applicants to have their loan applications for $250,000 or less analyzed and potentially sanctioned by the SBA before they are taken to lenders for consideration. The program focuses on the applicant’s character, credit, experience and reliability rather than assets. An SBA-designated intermediary works with the business owner to review and strengthen the loan application. The review is based on key financial ratios, credit and business history, and the loan-request terms. The program is administered by the SBA’s Office of Field Operations and SBA district offices.Delivered through: intermediaries operating in specific geographic areas.
>> Source: Small Business Administration website, Financing, SBA Loan Programs
