Loans for Small Business Owners

The SBA Recovery Act Loan Programs for Small Business Owners - The SBA provides funding for qualified nonprofit community-based lenders who, in turn, provide microloans of up to $35,000 to local entrepreneurs and small business owners, in conjunction with technical assistance training. In the last fiscal year, the average loan size was $11,600. The Recovery Act has provided $50 million in additional funding to support these microloans as well as $24 million for technical assistance training. The SBA provides these technical assistance grants to community-based lenders up to a maximum of 25% of their outstanding SBA debt to enable the intermediaries to provide marketing, management, and business counseling for potential and actual microloan borrowers. Thanks to the Recovery Act, community-based lenders will now be able to provide additional loans and technical assistance to assist start-up businesses and to help successfully grow small businesses. More information on SBA’s Microloan Program.

The SBA provides funding for qualified nonprofit community-based lenders who, in turn, provide microloans of up to $35,000 to local entrepreneurs and small business owners, in conjunction with technical assistance training. In the last fiscal year, the average loan size was $11,600. The Recovery Act has provided $50 million in additional funding to support these microloans as well as $24 million for technical assistance training. The SBA provides these technical assistance grants to community-based lenders up to a maximum of 25% of their outstanding SBA debt to enable the intermediaries to provide marketing, management, and business counseling for potential and actual microloan borrowers. Thanks to the Recovery Act, community-based lenders will now be able to provide additional loans and technical assistance to assist start-up businesses and to help successfully grow small businesses. More information on SBA’s Microloan Program.

Banks and other lending institutions offer a number of SBA guaranteed loan programs to assist small businesses. While SBA itself does not make loans, it does guarantee loans made to small businesses by private and other institutions.

Below is an overview of SBA’s guaranteed loan programs. For more information, click on the name of the program.

7(a) Loan Program: This is SBA’s primary and most flexible loan program, with financing guaranteed for a variety of general business purposes. It is designed for start-up and existing small businesses, and is delivered through commercial lending institutions.

The major types of 7(a) loans are:

• Express Programs
• Export Loan Programs
• Rural Lender Advantage Program
• Special Purpose Loans Program

CDC/504 Loan Program: This program provides long-term, fixed-rate financing to acquire fixed assets (such as real estate or equipment) for expansion or modernization. It is designed for small businesses requiring “brick and mortar” financing, and is delivered by CDCs (Certified Development Companies) private, non-profit corporations set up to contribute to the economic development of their communities.

Microloan Program: This program provides small (up to $35,000) short-term loans for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. It is designed for small businesses and not-for-profit child-care centers needing small-scale financing and technical assistance for start-up or expansion, and is delivered through specially designated intermediary lenders (nonprofit organizations with experience in lending and technical assistance).

Disaster Assistance Loan Program: This program provides low-interest loans to homeowners, renters, businesses of all sizes and most private non-profit organizations to repair or replace real estate, personal property, machinery and equipment, inventory and business assets that have been damaged or destroyed in a declared disaster.

Frequently Asked Questions

Q: Where can I find information on how to become a microloan intermediary?

A: SBA is seeking experienced microloan intermediaries to join its program. Please see the attached notice for more information on how to apply and criteria for becoming an SBA microlender.
SBA Seeks Microlenders for Expanding Program

Q: When will Recovery Act funds for microloans be made available?

A: Recovery Act funds are now available.

Q: Are there any new or changed reporting requirements in store for the use of Recovery Act funds?

A: Yes. The Recovery Act places an emphasis on high standards of transparency and accountability which in turn leads to several new reporting requirements. Recovery Act funds are subject to reporting requirements outlined in Section 1512 of the Act which have been further developed by OMB Memo 09-21 on June 22, 2009. SBA’s Microloans Program staff has been analyzing this document and will shortly release an information notice to our intermediaries that details the continuities and changes in reporting requirements from previous years. Once the notice has been published, we will include a link to it here. In addition, we will be conducting an online training session on the reporting requirements. We will provide more information here once the session date is set.

Q: Grants.gov is unresponsive or extremely slow. Is there an alternative method to give SBA my grant application for technical assistance?

A: Yes. Due to the Recovery Act, Grants.gov is expecting a significant increase in demand for their site over the next few months. To counter any potential disruptions to the grants application process due to overload on Grants.gov’s limited resources, SBA is offering an alternative method to their participating microloan intermediaries for submitting their grant application packages.

If you are experiencing difficulty with the Grants.gov site, SBA’s Microloan Program offers an alternative method for submitting grant applications for grants made with the Recovery Act funds:

* SBA can send you a zip file of the grant application which contains fill-able forms. To request this zip file, please contact the Microenterprise Development Branch at (202) 205-6485 or by email at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Please provide your Grants.gov case number with all your communications to SBA should you need to utilize this alternative route.

This option is meant as an alternative method for the grant application process should Grants.gov become slow or unresponsive due to heavy Recovery Act usage. Please continue to use Grants.gov as usual unless this situation arises