Guide to SBA Loans

Know your needs

Determine how much you need, how you will use the money and how the investment will help your business succeed. Be ready to explain how and when you can repay the money. Loan reviews are rigorous.

I recommend: The SBA small business financing overview will get you started.

Prepare your loan proposal

You'll need a business plan and a balance sheet with solid projections for income and expenses. You must provide information about who you are and why you can be trusted with a loan.

I recommend: Review financing requirements before you start the loan process, then download free templates to help you prepare a balance sheet, income statement and cash statement. When you're ready to start the loan process, visit the loan application page.

For the smallest loans, start here

Need a loan of $35,000 or less? The SBA Micro Loan program is the place to look. Offering loans up to $35,000 for terms up to six years, the program helps you get quick cash for just about anything you need except real estate. The average loan size is $10,500.

I recommend: Discover the ABCs of Micro loans and shop a list of participating micro lending organizations to find one near you.

Get to know the SBA 7(a) program

The SBA's primary lending program is its 7(a) Loan Guaranty, which offers both flexibility in how the money can be spent and terms of up to 10 years for working capital and 25 years for fixed assets. The loans are made by participating banks and can go as high as $2 million, although the SBA guaranty only goes up to $1.5 million.

I recommend: Discover what the SBA seeks in a 7(A) program loan application and learn more about eligibility criteria.

Get prequalified

One way to speed up the SBA loan process is to get prequalified. The SBA loan prequalification program offers to pre-screen applicants for loans up to $250,000. The review focuses on character, credit, and experience and can get you a pass into the express lane when you go to a bank for your SBA loan.

I recommend: See details of the SBA's prequalification program.

Shop and compare lenders

Since SBA loans are made through banks and organizations other than the SBA, it helps to shop around for the best terms and conditions. Some of the nation's biggest banks offer online SBA loan applications, but smaller regional banks can sometimes offer better deals.

I recommend: Download a loan application from Bank of America, Wachovia or Wells Fargo, or shop for lenders by downloading the SBA list of preferred lenders.

Big loans for bigger needs

Need more money? The much more demanding and restrictive CDC/504 loan program provides long-term financing for projects that create jobs and are deemed helpful to a community's economic development. The loan process is handled by one of 270 non-profit Certified Community Development Companies in the country. The biggest loans – up to $4 million – are available for manufacturing concerns.

I recommend: To learn more about the program go to the SBA 504 loan site. Also check out the list of Certified Development Companies around the country that handle 504 loans.