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SBA Financing Programs

The Small Business Administration has financial assistance programs that provide access to debt and equity primarily from banks or other private sources. Here, we cover those programs briefly.

The qualifications for these programs change from time to time. Be sure to check with SBA for the most recent criteria.

SBA's four basic loan programs are: Guaranteed Loans, Certified Development Company Loans or 504 Loan Program, Small Business Investment Companies, and Microloans.

SBA evaluates each loan application on two levels. The first is for eligibility which varies by industry and SBA program. The second evaluation is based on the credit merits of the application.

The SBA places its primary emphasis for loan consideration on the demonstrated ability of the business to repay all business-related debt, including the new loan obligation. Additionally, a reasonable "at stake" equity injection by the applicant is required.

Each application is individually considered based on earnings potential, collateral, track record and/or projections, management, and the type of businesses in the same field.

While SBA's standards are designed to be more relaxed than those of commercial lenders the SBA will not approve loans to businesses with unsatisfactory profit history, inadequate equity investment, unsupported projections, or, unacceptable credit histories.

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