If you run a small business and you're looking for funding to grow it, you may have heard about SBA Loans. You may have some questions about how they work and if they are right for you and your business.

What Is an SBA Loan?

SBA loans are made in an agreement between the SBA (Small Business Administration), a government agency, and the lenders, as the SBA does not directly offer the loan.

Different Types of SBA Loans and Uses

There are different types of SBA loans; the list of loans offered is quite long. Some options are:

  • 7(a) loan
  • SBA 504 loans
  • SBA 8(a) Business Development Loans
  • SBA Microloans
  • SBA Community Advantage Loans
  • SBA CAPLines
  • SBA Export Loans
  • SBA Disaster Loans

Lenders tend to have their own evaluation process in addition to the SBA's requirements as well, so the application process can take up several weeks of your time.

Who Qualifies for SBA Funding?

SBA loans are popular with small business owners who need quick access to funds, including startup funding. However, it can be challenging to pass the application process. One essential thing to qualify for an SBA loan is that you must have a good credit score.

Depending on who the lender is, you may want to ask about SBA loan requirements, loan terms, and how to apply for an SBA loan or other small business loans before you go ahead with it.

Part of the application process includes a business plan showing how your small business will use the funds and how you will complete the SBA loan payback. This isn't required by all lenders, but you'll want to be prepared if or when they ask.

1. Growing Your Business

If you have a clear set of goals you'd like to achieve, an SBA loan for a small business can be useful to grow your business in the following ways:

  • Marketing and advertising
  • Long-term assets
  • Supplies and furnishings for your office
  • Meeting payroll and hiring more employees as needed

However, keep in mind that SBA loans can be somewhat inflexible with restrictions on how the funding can or cannot be used.

2. Payroll

Several SBA loans can help you make payroll or "working capital" either short-term or long-term. Some of these options include the 7(a) loan and microloans mentioned above, as well as:

  • SBA Community Advantage Loans
  • SBA Export Loans
  • SBA CAPLines

3. Economic Relief

What can the SBA disaster loan be used for? The SBA Economic Injury Disaster Loan Program or EIDL helps many people - businesses, private NPOs, homeowners, and renters - whose property or machinery was destroyed in a disaster.

ROK's simple online application is a great first step, so that you can speak with a Business Financing Advisor and discuss your options.

4. Equipment

You may occasionally have to make big purchases for your business of things like machinery, vehicles, furnishing and fixtures for your office and so on.

Even smaller purchases like materials and supplies can be made with an SBA loan. You have to ensure that you can show that these purchases are vital for your business' success or growth.

5. Real Estate: Purchases, New Construction or Renovation

SBA loans can also be used for real estate purchases and renovations. If you are buying a building, planning construction, or renting an office space, you can apply.

Apply Now

If you'd like help for your small business and think that an SBA loan is the way to go, feel free to apply now.

About the Author, Madison Taylor

Madison Taylor is the Brand Ambassador at ROK Financial. She is responsible for raising brand awareness and business relationships with business owners across the country. Madison loves that she plays a small role in getting Business Back To Business Through Simple Business Financing and looks forward to hearing what you think about the blogs she creates! Madison has been working in the financial space for six years, and loves it! When she is not at work, you will find her at home learning a new recipe to test out on her family or going on new adventures with her friends.