Why SBA Loans

Why should a small business owner consider SBA loans? The Small Business Administration, more commonly known as the SBA, is a federal agency to protect and assist America’s greatest resource...small business. The agency was created by Congress in 1953, to help capitalize businesses who could not find reasonable financing. Today, SBA loans are the primary source of capital injected into the small business community nationwide. Last year the SBA assisted small businesses with over 12 billion dollars of loan guarantees. SBA’s mission is to stimulate and foster economic growth through small business, because helping small business get started and become successful is good for the nation’s economy. The SBA will guarantee SBA loans made by a lender enrolled in the program. By issuing an SBA federal guarantee to the bank, a loan which might not be approved on conventional terms can be approved.

Obtaining capital is the single most difficult hurdle a small business experiences. Giving small business access to capital is the main goal of the SBA. Many business owners find cash flow to be a major concern. For them an SBA guaranteed loan may be the only answer and possibly the best way of obtaining long term financing. SBA guaranteed loan terms typically range from 7 to 25 years depending on the purpose of the loan. The loan is fully amortized and under most conditions carries no prepayment penalty.