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SBA Loans FAQs

Written by: Start Your Business

Article Overview: How do I know if I qualify as a small business so that I can receive SBA assistance?

SBA Loans FAQs

SBA Loans FAQs

How do I know if I qualify as a small business so that I can receive SBA assistance?

Approximately 95% of all businesses are eligible for SBA assistance. Size standards vary widely depending upon the industry; however, as a general rule, your business is within SBA size limits if it is in manufacturing or wholesaling with fewer than 100 employees or in retailing or service with annual sales under $5,000.000 To find out more about size standards, call the SBA Office of Size Standards at (202) 205-6618.

Do I have to be declined by a bank to be eligible for an SBA guaranteed loan?

No, you do not have to be turned down by a lender to qualify for a loan guaranteed by the SBA.

What are the SBA's loan limits?

The SBA does not let loan minimums. Many lenders may prefer to process loans for under $100,000 under SBA's LowDoc program. The maximum amount the SBA can guarantee is generally $750,000.

How much money do I need to have in order to qualify for an SBA loan?

A borrower's capital contribution generally must be one-fifth to one-third of the total project cost.

How long will it take to get my loan?

A credit decision on a complete loan package is usually made within ten working days after it is received by the SBA, not including bank processing time. This assumes that the borrower and lender have provided all the information necessary to process the loan.

Where can I get an SBA loan application?

SBA loan forms are available from a participating lender, who will also be able to provide information about both the bank and SBA documentation required. The above text is taken from Small Business Resource Guides published for individual SBA District Offices in co-sponsorship with RENI Publishing of Winter Haven, FL 33880-3052. SBA's participation in this publication is not an endorsement of the views, opinions, products, or services of the publisher or any advertiser or other participant appearing herein. All SBA programs or co-sponsored programs are extended to the public on a nondiscriminatory basis. Individual District Office editions are copyrighted. SBA Auth. No. 97-7110-64.

How do I get certified for special SBA programs?

Certification programs can help you market your business to both large business and government procurements. There are three core certification programs: the Small Disadvantaged Business Program (SDB), the 8(a) Business Development Program, and the HUBZone Program.

The Small Disadvantaged Business (SDB) Certification Program is designed to treat small companies equitably and empower them to pursue business in both the private and public sector contract arena. Once an SDB is certified, it will be eligible for specific procurement benefits.

The SBA's 8(a) Business Development Program is an initiative that helps small disadvantaged businesses compete in the American economy. Program participation is divided into two stages. The developmental stage is designed to help 8(a) certified firms overcome their economic disadvantage by providing personalized business assistance in expanding their business and fostering meaningful business relationships. The transitional stage is designed to help program participants become more effective in both the large business and the government sector market in dealing with complex business deals and to prepare them for post 8(a) program expansion and development. The HUBZone Empowerment Contracting Program is designed to stimulate economic development and create jobs in urban and rural communities. The program provides contracting opportunities to small businesses located in and hiring employees from Historically Underutilized Business Zones.

What do I do when I am ready?

You have done your homework: you have a complete business plan, you know where you want to operate, you know how much cash you will need, and you have specific information on employee, vendor, and market possibilities. You now may want someone to look over your plans objectively. Contact the business department at a local college for another opinion. A SCORE representative at the Small Business Administration can also review your work and help with the fine-tuning. Then, when you have made the final decision to go ahead, it is time to call the bank and get going. Good luck! All of SBA's programs and services are extended to the public on a nondiscriminatory basis.

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