As an entrepreneur, you may know that applying for small business funding is vital to get your business to the next level. Whether you’re looking for loans or disaster relief Dooley Noted can provide guidance in the process.
The Small Business Administration (SBA) provides many options for funding for small businesses. Texas Small Business owners have options when it comes to funding, and we want to provide guidance through the process.
The CDC/504 Loan Program provides long-term, fixed rate financing of up to $5 million for major fixed assets that promote business growth and job creation.
504 loans are available through Certified Development Companies (CDCs), SBA’s community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA.
To be eligible for a 504 loan, your business must:
Other general eligibility standards include falling within SBA size guidelines, having qualified management expertise, a feasible business plan, good character and the ability to repay the loan.
Loans cannot be made to businesses engaged in nonprofit, passive, or speculative activities. For additional information on eligibility criteria and loan application requirements, small businesses and lenders are encouraged to contact a Certified Development Company in their area.
Use of a 504 Loan
A 504 loan can be used for a range of assets that promote business growth and job creation. These include the purchase or construction of:
Or the improvement or modernization of:
A 504 loan cannot be used for:
This information is sourced directly from sba.gov. To learn more visit, https://www.sba.gov/funding-programs/loans/504-loan.
The microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000.
SBA provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries administer the microloan program for eligible borrowers.
Each intermediary lender has its own lending and credit requirements. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner.
Use of a Microloan
Microloans can be used for a variety of purposes that help small businesses expand. Use them when you need less than $50,000 to rebuild, re-open, repair, enhance, or improve your small business.
Examples include:
Proceeds from an SBA microloan cannot be used to pay existing debts or to purchase real estate.
This information is sourced directly from sba.gov. To learn more visit, https://www.sba.gov/funding-programs/loans/microloans.
The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is the best option when real estate is part of a business purchase, but it can also be used for:
The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates. Your lender will help you figure out which type of loan is best suited for your needs.
To be eligible 7(a) loan assistance, businesses must:
Use of a 7(a) Loan
This information is sourced directly from sba.gov. To learn more visit, https://www.sba.gov/funding-programs/loans/7a-loans.
Small businesses, small agricultural cooperatives, and most private nonprofit organizations located in a declared disaster area and which have suffered substantial economic injury may be eligible for an SBA Economic Injury Disaster Loan (EIDL).
If you have suffered substantial economic injury and are one of the following types of businesses located in a declared disaster area, you may be eligible for an SBA EIDL:
Use of an EIDL
Working capital and normal expenses such as the continuation of health care benefits, rent, utilities, and fixed debt payments
This information is sourced directly from sba.gov. To learn more visit, https://www.sba.gov/funding-programs/disaster-assistance/economic-injury-disaster-loans.
Businesses of all sizes in a declared disaster area are eligible for disaster assistance loans from the SBA. The SBA offers disaster assistance in the form of low-interest loans for physical and economic damage caused by major disasters or emergencies declared by the president. So, if you’re thinking of applying for a small business loan, it’s important to know how the SBA defines disaster and how that affects you and your small business.
According to the SBA, disaster is “[a]n unforeseen combination of circumstances that causes serious damage to a business, rendering it unable to continue operating as usual.” This includes civil unrest and natural disasters such as hurricanes, flooding, wildfires typically affecting at least 25 homes or businesses sustaining uninsured losses at 40 percent or more.
The EIDL is one of the most common disaster relief loans offered by the SBA. Learn more about applying for the EIDL.
Did you know you could start, grow or recover your small business with SBA loan assistance? The Small Business Administration (SBA) offers a variety of funding programs such as grants, microloans, express loans, and disaster relief funding to assist small businesses no matter their need.
Ultimately, the main goal of the SBA is to help small businesses get financing. They offer small business loans through various lending partners.
Sometimes the application process can be tricky, that’s why Dooley Noted is here to help business owners through the process.
It is important to be aware when it comes to accepting small business loans – be on the lookout for high interest rates and high fees! Shop around and look for competitive offers, and consider speaking with a Texas Business Lawyer, financial planner or accountant before you sign your next loan.
Additionally, it is always best to consult with a business attorney prior to signing any legal documents.
Dooley Noted can help you find a loan that’s most fitting to your business and even navigate the application process and serve as a representative for counsel and questions along the way.
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