SBA Loans From A to Z
A comprehensive look at the Small Business Administration's loan programs
By Karen Roy
The Small Business Administration (SBA) has a simple, heartening
mission: to secure financing for small businesses that might not
otherwise be able to obtain it, but that still have a good chance
of succeeding. True to this mission, some SBA loans have less
stringent requirements for owner's equity and collateral than
do commercial loans, making the SBA an excellent source of
financing for start-ups and young businesses.
The most basic eligibility requirement for SBA loans is the
ability to repay the loan from cash flow, but the SBA also looks at
personal credit history, experience in the industry or other
evidence of management ability, collateral and owner's equity
contributions. If you own 20 percent or more equity in the
business, the SBA asks that you personally guarantee the loan.
After all, you can't ask it to back you if you're not
willing to back yourself.
Here's a breakdown of the SBA's various programs:
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