All About SBA Start Up Loans
Contrary to popular belief, there are not many grants and free money programs available for entrepreneurs that want to start their own business. Even though many banks and lenders are traditionally not very generous to entrepreneurs, there are plenty of SBA start up loans available for small business owners to use to get their business off the ground and on the right track. With the right approach, you can secure the funding you need and use it in a variety of ways to increase the longevity and profitability of your business.
7a Loan Program
One of the most popular types of SBA start up loans is the 7a loan program. Entrepreneurs who are approved for the 7a loan program can borrow up to $750,000. Since this money does not come directly from a lender, it can be used to secure equipment, as startup and working capital, to purchase assets, and to lease retail or commercial space for business. It is important to note that the 7a program is only for entrepreneurs that have less than $2.5 million in net income and less than $7 million in material net worth.
504 Loan Program
Entrepreneurs that are approved for the 504 loan program can receive up to forty percent of the projected costs for their startup. Small business owners are required to supply at least ten percent of the costs, while banks and other lenders can supply the remaining fifty percent. While this can provide you with a good amount of cash flow to get things started, there are a few restrictions in place. The money cannot be used to purchase inventory, as working capital, to consolidate, repay, or refinance debt. The main goal of the 504 program is to make it possible for small business owners to purchase the assets, facilities, and equipment they need to give their business a good start.
7m Micro Loan Program
Entrepreneurs that want to start a business are eligible to apply for the 7m Micro loan program. This program provides small businesses with up to $35,000 for their business. There is a stipulation that all approved entrepreneurs need to enroll in educational programs that are administered by the intermediary micro lenders that provide the financing. The money that is awarded can be used for a variety of startup expenses including assets and inventory.
No matter what your business idea is, there are SBA start up loans available for you to turn that idea into a lucrative business. Take your time, put together an impressive business plan, and pursue your dream of being an entrepreneur.