Am I Eligible For An SBA Loan?

For small business owners in the States, there are few better forms of funding than an SBA loan. This is a loan from the Small Business Administration (SBA) – a federal agency – which is designed to support and encourage growth for small businesses in all industries across the USA. The SBA has been established since 1953 and provided loans to over 20 million business owners for startup costs, growth, business acquisition, working capital, and various other costs. There are many perks to an SBA loan, but it is not one that everyone will qualify for, so read on to find out if you are eligible or not.

For-Profit

First, in order to qualify for an SBA loan, you must be running a for-profit business and one which is registered officially and operating legally. This means that non-profit organizations are unable to benefit from an SBA loan.

Conduct Business In The USA

The SBA also requires that the business is physically located in the USA and operates in the States and/or its territories. It is also likely that owners of the business will need to be US citizens or holders of a Green Card.

Invested Equity

Another important qualification requirement is the business owner investing their own time and money into the business.

Size

Size is another important factor, and – as the name of the agency suggests – an SBA loan is only available to small businesses. Size requirements will depend on the industry that you are in, the number of employees that you have and/or average annual receipts.

Exhausted Other Finance Options

You will not qualify for an SBA loan unless you have attempted to receive funds from another financial lender, such as a small business loan from a bank.

Strength Of Business & Credit Rating

An SBA loan is designed to support small businesses that struggle to get funding elsewhere, which means that it is designed to have less strict requirements than other forms of funding. They are not just handing out money to any US-based business, though, as you must also show that the business has the potential for success. You will also need to show a good credit score in order to show that you are a responsible borrower.

Applying For An SBA Loan

These are the main requirements for an SBA loan, but there may be further eligibility requirements depending on the lender and loan program. The first step will be to use an expert like biz2credit.com to learn more about this type of loan and to find the right SBA funder for your specific needs, whether this is startup costs, growing a small business or buying a business.

Should I Apply? SBA loans are an excellent form of funding for small businesses in the States, but not everyone will be eligible, and you will want to make sure that you qualify before going through the application process. This post outlines the main eligibility requirements for an SBA loan, but there may be further requirements, so you should always carry out further research keeping your specific circumstances in mind.

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