There is no doubt that getting an SBA loan for your company can be one of the most beneficial ways of securing funding needed for expansion or business growth. With low interest rates and government backing, there are very few options better than this, to help a business really take off. Here’s what you should know about applying for an SBA business loan.

What exactly is an SBA loan?

Contrary to what its name might have you think, an SBA loan is not issued by the federal government’s Small Business Administration itself. The actual loan will be issued by a traditional bank, but the bank will be much more likely to approve your loan, because at least a portion of it will be guaranteed by the Small Business Administration. In actual practice, a loan of up to $150,000 would be guaranteed up to 85% and any amount over $150,000 would be guaranteed up to 75% by the SBA.

How to get an SBA loan

The best way to begin the process of applying for an SBA loan is to go directly to the Small Business Administration website, and fill out a form to apply. On the site, you will be directed to collect all necessary business documents before visiting your local district office for an interview. When you consult with personnel at the district office, you will be given the names of approved lenders in the area which the SBA has done business with before.

Types of SBA loans

There are several different types of SBA loans which you might apply for, depending on your business circumstances, and what you intend to use the money for. Here are the most common types of SBA loans:

• 7(a) loan – the loan money must be used for business expansion, equipment purchases, or working capital, and is federally guaranteed up to $5 million 

• 504 loans – these loans are also guaranteed up to $5 million, and are used exclusively for equipment purchases, facility purchases, or land acquisition. These kinds of loans are not processed through conventional banks, but are made through non-profit organizations or private-sector lenders 

• microloans – these are small-amount loans up to $50,000, and are generally processed through non-profit organizations in the community 

• disaster loans – these kinds of loans are made available by the SBA for business owners which have been impacted by various natural disasters, and have a ceiling of $2 million.  

SBA Loans through Blackwater Capital Funding 

SBA loans can be one of the best ways of helping your small business achieve the growth you’ve always hoped for. Contact us at Blackwater Capital Funding with any inquiries you have about SBA loans, or to start the process of applying for your loan.