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What is an SBA Loan?

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Keeping your small business strong and growing requires tenacity, intelligent planning – and funds. To gain access to the money your company needs to survive and thrive, you should consider loans backed by the U.S. Small Business Administration. These are available through SBA Lenders – authorized financial institutions such as Kentucky Bank.

Whether it’s time to take out an SBA loan – and which program is right for you – will depend upon where your business is in its developmental arc. From organizations just starting up to established companies hoping to grow, many types of firms will require an infusion of money from time to time. The SBA guarantees loans of all sizes, from $500 to over $5 million in the agency’s own words, and it’s worth considering whether your small business is a good candidate.

SBA Loans in General

The SBA notes that there is no universal standard for which companies are eligible for loans. Each case is unique, and it’s worth speaking to a lender to see whether your company qualifies. The baseline is quite simple, however. Companies should be small, for-profit businesses with their offices and operations located in the U.S., and they should be able to identify a sound purpose for their operations. Business owners should have invested equity, whether time or money, in the company, and they should not have other loans providing finances.

An SBA loan may provide working capital to fund your ongoing operations, or it can be used to buy a particular asset, whether that takes the form of a piece of equipment, a parcel of land or another essential investment item. You may need capital to get your company through a particular season, or to refinance or settle business debt. On the other hand, sometimes your business’s biggest need is a single asset, such as a new piece of hardware or a remodeled headquarters building.

Blocks assembled to create the word "funding."Where will your company’s funding come from?

Primary SBA Loan Options

While Kentucky Bank can help company owners with all of the many available SBA-backed loan options, there are two that are especially prominent. The larger-scale SBA 7(a) loan program is designed for companies making major expansion efforts, while the SBA Express program is a more flexible program,

The SBA 7(a) loan is the most popular kind of loan backed by the administration. It is extended to qualified borrowers who are interested in growing their existing companies drastically or acquiring a new company altogether. Borrowers from many different backgrounds can apply for such a loan. The Express loan has a cap of $350,000 and can be used for any of the purposes outlined by the SBA. Whether the company needs a new piece of equipment,  a plot of land or a safe source of working capital to carry the organization through a slow season, this loan program is available.

When your small company encounters a financial hurdle or readies for a major investment, you can look to Kentucky Bank, an SBA Lender with the offerings that can keep your business afloat the experience to help you choose the right offer for you. Request an appointment today to talk about next steps.

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