The Small Business Administration (SBA) is an independent federal government agency that exists to support small businesses and entrepreneurs across the United States. To do so, the SBA offers a variety of training programs and educational resources to help small businesses thrive. In addition, the SBA guarantees loans for small business borrowers throughout the country. For example, in 2017, the agency’s flagship 7(a) loan program guaranteed more than $25 billion of loans for small businesses.

The Small Business Administration is an agency operated by the US federal government, with the specific task of helping entrepreneurs and small business owners avoid hurdles and pitfalls, and achieve success. The organization was founded in 1953, and has helped millions of business owners and entrepreneurs since that time.

Today’s Small Business Administration is a direct successor of the Reconstruction Finance Corporation, or RFC, created by President Hoover in 1932 in response to the Great Depression. The organization is also a descendant of the Smaller War Plant Corporation, or SWPC, which was founded in 1942, but then dissolved after the end of WWII. The RFC was ultimately dissolved as well 10 years later in 1952. The same year, President Eisenhower urged the creation of a new agency that would continue the work of both, and the Small Business Administration was born.

From the beginning, the SBA has both made loans and guaranteed loans to small business owners and entrepreneurs, according to the organization, but it is actually very similar to some other government agencies. For instance, the Federal Housing Administration, or FHA, only guarantees loans to would-be homebuyers. They do not make them. The SBA actually operates in the same way. The organization only insures or guarantees the loans made through qualifying, approved lenders enrolled in the SBA loan programs.

The Small Business Administration (SBA) provides a variety of support programs for entrepreneurs across the U.S. These include:

• Small Business Development Centers: The SBA helps fund around 900 Small Business Development Centers (SBDCs) across the U.S., which are often located at colleges and universities. SBDCs can help entrepreneurs work on their business plans, provide them assistance with manufacturing, financial advice, as well as help them apply for other SBA programs, like the SBA 8(a) Business Development program.
• SCORE: The SBA’s SCORE program has developed into the America’s preeminent network of volunteer business mentors. Since 1964, SCORE has helped educated 10 million business owners via free workshops, seminars, coaching, and other educational programs.
• Women’s Business Centers: Partially funded by the SBA, Women’s Business Centers (WBCs) are intended to help women entrepreneurs start small businesses. While anyone can get assistance through a WBC, they are committed to focusing a large amount of their efforts on serving those that are economically or socially disadvantaged. There are 100 over WBCs across the country, and combined, they serve more than 100,000 female entrepreneurs each year.

In its efforts to support small business growth by providing access to capital, the SBA offers a wide range of different loan programs and funding options. The most commonly accessed is called the 7(a) program, but SBA Express loans are also quite popular. The SBA 504 loan is something different entirely, and has very few similarities to other programs. However, for all that, it can offer important advantages and benefits for small business owners in need of financing for specific purposes.

The Small Business Administration (SBA) provides a variety of support programs for entrepreneurs across the U.S., as well as access to capital through loan programs and funding options.

The Small Business Administration (SBA) offers a variety of loan products to meet the unique needs of small business owners. The most widely used loan is the SBA 7(a) loan, which can be used to finance the acquisition or refinance of commercial properties such as office buildings, warehouses, industrial structures, retail assets, and other types of owner-occupied commercial real estate. Additionally, the SBA offers 504 loans, which are typically used to finance the purchase of fixed assets such as equipment or real estate. These loans are provided at variable interest rates for terms of up to 25 years, or shorter if real estate is not involved. Rates are tied to the WSJ Prime Rate, and the higher the loan amount, the lower the spread, typically.

You can apply for an SBA loan by verifying your eligibility, checking your credit, finding a lender or CDC, getting pre-qualified, deciding on your purchase, and completing the application. You can download the loan application as a PDF file from the SBA and deliver it to your CDC.

The Small Business Administration (SBA) has a few eligibility requirements for an SBA loan. These include:

• You must be officially registered as a for-profit business, and you must be operating legally.
• As the business owner, you can’t be on parole.
• Your business must have fewer than 500 employees, and less than $7.5 million revenue on average each year for the past three years.
• Your net income must be under $5 million (after taxes and not counting carry-over losses), and your tangible net worth must be less than $15 million.
• You must show you’re investing your own time and money into the business, having “invested equity.”
• Your business must be physically based in the United States, and you must be doing business with the U.S. and its territories.
• Your small business must be in an SBA-eligible industry (speculative, illegal and non-profit businesses don’t get to play). Learn more about Eligible and Ineligible Industries for SBA 7(a) Loans.
• You’ll need to show that you’ve already tried and failed get funds from other financial lenders, fully exhausting non-SBA loan options.
• You’ll need to prove you’ve got a sound business purpose for the loan you’re requesting, and that your intended funds usage is approved by the SBA.
• You’ll need to prove you’re not delinquent on any existing debts to the U.S. government (taxes, student loans).

In addition to the eligibility requirements, there are a few additional qualities which can increase your likelihood of SBA 7(a) loan approval:

• A good credit score - preferably above 680.
• A history free from recent bankruptcies, foreclosures, or tax liens.
• Having been in business for at least two years.
• The ability to provide collateral for loan requests over $25,000.
• The ability to make a down payment of 10% if your intended use of funds is to purchase a business, commercial real estate, or business-related equipment.
• Sufficient cash flow to meet your debt obligations.
• Sufficient working capital (once you subtract liabilities from assets).
• “Good character” according to the SBA (partially decided based on your track record of managing your resources and day-to-day business affairs).