Specific types of businesses or for more specific purposes

The SBA, Small Business Administration, provides loans to small businesses through financial institutions such as banks, microlenders, and online lenders. These SBA loans are government guaranteed, meaning lenders will offer them to small businesses at low interest rates because the government has promised to pay back 85% of the loan in the event of default.

 

The three most talked about SBA loan types are:

    1. 7(a) Loans: the most popular loan provided by the SBA, available to new and established businesses with a FICO SBSS Score of 140 or above.
    2. 504/CDC(Certified Development Company) Loans: long term financing available for businesses to purchase real estate or high-cost assets they need to run their business.
    3. Microloans: small loans up to $50,000 available through non-profit community lenders to new and established businesses.

But wait… there’s more! In fact, there are over 12 different types of funding provided by the SBA.

The following list of additional SBA loans are either for specific types of businesses or for more specific purposes. Some of these loans fall under the umbrella of one of the above loans. It’s worth taking a look to see if you qualify for one or more of these loans.

 

Special Eligibility Loans

Community Advantage Loans

Part of the 7(a) loan program, this loan type is for newer businesses in low-to-moderate income areas. Employees of the business must be considered low income or reside in an area that is a low-to-moderate income (LMI) area. Whereas most 7(a) loans require a FICO SBSS score of 160 or above, you’ll only need a 140 or above to qualify for a community advantage loan. Community Advantage lenders offer these loans up to $250,000.

 

Rural Business Loans

Another loan categorized under the 7(a) program, these loans are for businesses in rural areas that need funding for working capital, equipment, real estate, and certain types of debt refinancing.

These loans are actually provided by the U.S. Department of Agriculture. The business’s majority stakeholder must be a U.S. citizen or permanent resident, and the borrower must reside in an area with fewer than 50,000 inhabitants. If you think your business qualifies, the best place to start is by contacting your state Rural Development Field Office.

 

CAPLines

A CAPLine is like a (potentially enormous) line of credit. Businesses can secure up to $5 million for short-term working capital needs. These are meant to help businesses take on more public and private contracts and purchase orders. A CAPLine can take on four forms:

    1. Revolving line of credit — similar to inventory financing or invoice financing. Your assets or account receivables will be looked at to determine how much you can get on your line of credit.

 

    1. Seasonal line of credit — for businesses that need to build up inventory for an upcoming season of high sales.

 

    1. A contract loan — for businesses that need to fill contracts or purchase orders.

 

  1. A builders line of credit — for contractors looking to construct or rehabilitate a commercial or residential property.

CAPLines fall under the 7(a) umbrella.