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SBA Loans

Posted on | October 23, 2009 | No Comments

The SBA offers numerous loan programs to assist small businesses.  SBA is primarily a guarantor of loans made by private and other institutions, they do not directly loan to businesses.  Contact the Nebraska SBA office for a list of Nebraska approved SBA lenders.

• 7(a) loans are the most basic and most used type loan of SBA’s business loan programs and are only available on a guaranty basis. The loans are provided by lenders who choose to structure their own loans by SBA’s requirements and who apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guaranty 7(a) loans.

Besides credit and eligibility criteria, there are general terms and conditions SBA requires of a business seeking financial assistance.  This information is available on the SBA Basic 7(a) Loan Program page.

• The SBA Microloan Program provides very small loans to start-up, newly established, or growing small business concerns.  SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000.  Applications are submitted to the local intermediary and all credit decisions are made on the local level.  Interest rates will vary, depending upon the intermediary lender and costs to the intermediary from the U.S. Treasury. Generally these rates will be between 8 eight percent and thirteen percent.

A contact list of eligible Microloan lenders is available on the SBA Microloan page.

• SBA America’s Recovery Capital Loan Program can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship due to uncertain economic conditions. Each small business is limited to one ARC loan. ARC loans will be offered by some SBA lenders as long as funding is available or until September 30, 2010, whichever comes first. The temporary ARC program offers interest-free loans to viable small businesses, which carry a 100 percent guaranty from the SBA to the lender and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years.

For ARC loan details contact the Nebraska Small Business Association or SBA ARC loan website.

• The CDC/504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. A Certified Development Company is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses.  The maximum SBA debenture is $1,500,000 when meeting the job creation criteria or a community development goal. Generally, a business must create or retain one job for every $50,000 provided by the SBA except for “Small Manufacturers” which have a $100,000 job creation or retention goal (see below).The maximum SBA debenture is $2.0 million when meeting a public policy goal.

Current SBA 504 lender in Nebraska is the Nebraska Economic Development Corporation (NEDCO)

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