Start up Loans You Can Get Through the Small Business Administration

A Home Business Article Contributed by Bonny Albo

Start up Loans You Can Get Through the Small Business Administration

Have you ever thought about starting your own business, but weren't sure if you would be able to find a start up loan? Read on for three small business start up loans available through the Small Business Administration (SBA), a division of the U.S. government. Please note that all loans mentioned here are only available in the U.S.

Basic Small Business Start Up Loan

This loan is actually called the "Basic 7(a) Loan Guaranty", and is available to start up small businesses, existing small businesses, and commercial lending institutions.

This loan is the most frequently used loan with the SBA, and is normally used with small business owners who aren't normally able to secure a loan through other avenues. The loan is very flexible, and can be used for a wide variety of items, including machinery, equipment, renovations, furniture, and even working capital. Debt refinancing may also be available with special circumstances. These loans are processed through local lending institutions (such as a bank), and mature either in 10 years (for loans given for working capital), or 25 years (for fixed assets).

For more information on this loan, visit http://www.sba.gov/financing/sbaloan/7a.htm.

The Certified Small Business Start Up Loan

This loan's official name is the "Certified Development Company (CDC), a 504 Loan Program". This loan has a larger potential value than the others, with a maximum of $1.3 million dollars in funding. Because of the high loan value, the loan is only available to finance long-term, fixed-rate funds to small businesses that need property, machinery or equipment to expand the business.

The small business owner in this case will be required to provide at least 10% equity for the loan, and also includes a junior lien covering up to 40% of the total cost, and a loan from a private sector lender organization with a senior lien.

For more information on this loan, visit: http://www.sba.gov/financing/sbaloan/cdc504.htm.

The Small Business Microloan Start Up Loan

This loan is called the "Microloan, a 7(m) Loan Program". It provides up to a maximum of $35,000 for small businesses to use for short-term financing. Items aquired through this loan can include inventory, supplies, furniture, fixtures, machinery and/or equipment, but cannot be used for the purchase or property.

Along with this loan comes the business experience and management assistance of the intermediary who is actually lending the small business money; the funds do not actually come from the SBA in this case. Please note that his loan is only available in selected locations in most U.S. states.

For more information on this loan, visit: www.sba.gov/financing/sbaloan/microloans.htm.

The SBA also offers a pre-qualified loan for certain small businesses. This loan has a maximum pre-qualification of $250,000, focusing on intangibles such as a small business owner's character, skills and credit, instead of their assets. For more information on this loan, visit: http:// www.sba.gov/financing/sbaloan/prequalification.htm.