The U.S. federal government offers loans and grants through the Small Business Administration (SBA) to assist entrepreneurs and small businesses in need of financing. These loans are provided by approved lenders and backed by the SBA.
Revenued does not directly provide SBA loans; however, we have assisted businesses in applying for an SBA loan known as the Paycheck Protection Program (PPP). Our online platform and partnership with Cross River Bank paved the way for over 130,000 PPP applications that resulted in more than $1.3 billion in SBA loans.
The SBA loan program is an attractive option for newer businesses with low business credit who need a low-interest rate loan. Even though Revenued is not the source for most of these loans, we want our customers to take advantage of programs that could support their business’ success. Here is some more information about SBA loans and how they could benefit your company.
Benefits of SBA-Backed Loans
The SBA does not lend funds directly to borrowers, yet it offers a guarantee on loans so that lenders can provide financing to businesses that may not otherwise get a chance. Small companies that banks view as risky investments and can’t get funding through traditional means could qualify for SBA-backed loans.
Other benefits of SBA-backed loans include:
- No collateral needed in many cases
- Competitive terms, including low rates and fees
- Flexible overhead requirements
- Ongoing support in some cases, with education and counseling opportunities
Eligibility Requirements for SBA Loans
To qualify for an SBA loan, you must be a for-profit business operating legally in the U.S. that has exhausted other business financing options. Though requirements are less stringent than traditional loans, the process often involves much more paperwork and can be more time-consuming. It can often take 60 days or more to determine if the SBA approved your loan.
Each loan product has exceptional standards, and the lender with whom you apply (the SBA guarantor) can add their eligibility requirements. You may also be asked about:
- What you do to create income
- Number of employees
- The company’s revenue and assets
- Your business experience and background
- The business’ plan and purpose
- Your personal credit history
- Your ability to repay the loan
- Your business credit score
Types of SBA Loans
There are multiple SBA loan products, each of which works in its unique way to assist with specific business financing situations. An SBA-approved lender can help you explore your options to find the right one for your business needs.
SBA 7(a) Loans
The 7(a) loan program is the primary tool used by the SBA to lend money to small businesses, and includes several subcategories of loan products:
- Standard 7(a) — Loans and lines of credit for up to $5 million that can be used for most business expenses, including working capital, debt refinancing, and equipment purchases
- 7(a) Small — Loans of up to $350,000
- SBA Express — Faster SBA review so loans up to $350,000 can be approved within 36 hours
- Export Working Capital — Loans and lines of credit up to $5 million for companies exporting goods made in the U.S.
- Export Express — An accelerated approval process of 24 hours for up to $500,000 in financing to exporters
- International Trade — Long-term financing of up to $5 million for business expansion to support export sales or to compete with foreign importers
- CAPlines loan — Lines of credit for seasonal and other cyclical working capital shortcomings
- Veteran’s Advantage — Reduced-fee SBA loans for veterans, active military personnel, and their current or widowed spouses.
SBA disaster loans are temporary programs to help businesses affected by natural disasters like hurricanes or wildfires. Additionally, Congress created loan programs under the CARES Act to help companies affected by the COVID-19 pandemic:
- PPP — Small businesses affected by the COVID-19 shutdown can get a potentially forgivable loan to cover employee paychecks and other eligible expenses. This program ended on Aug. 8, 2020, but could be resumed with new legislation.
- Economic Injury Disaster Loan (EIDL) — Long-term loans for up to six months of working capital are available to businesses affected by COVID-19 or another disaster. These loans can be paid back over 30 years and have low-interest rates of 2.75% to 3.75%.
- Express Bridge Loans (EBL) — Companies with existing SBA lender relationships can access up to $25,000 in emergency funding while they wait for long-term financing applications to be processed. This program is set to expire on March 13, 2021.
The SBA 504 Certified Development Company Loan provides up to 90% of the cost to acquire or possibly refinance real estate and other significant assets like equipment. Interest rates are below standard market rates.
Select intermediary lenders can offer SBA Microloans of up to $50,000 to businesses and non-profit childcare centers that are just starting or looking to expand. Lenders for this loan product are non-profit community groups that also offer technical and managerial assistance.
Let Revenued Guide Your Business Success
The SBA loan program includes a wide array of options that could benefit your small business. With modest interest rates, minimal fees, and lower collateral and credit score requirements, even newer companies that have been denied traditional bank loans could be eligible for SBA-backed funds.
If you can’t qualify for an SBA loan, consider our new Revenued Business Card. This is a business card that is like nothing else out there. Use the Revenued Card during slow seasons to cover payroll or use it as a debit or credit card to replenish inventory. Unlike SBA loans, you can have a subprime credit score and still qualify for the Revenued Business Card.
You’re eligible as long as your U.S.-based business does at least $10,000 in sales per month and maintains an average daily balance of $1,000.
Call (855) 943-5363 to talk to one of our helpful customer service reps about the new Revenued Card. Or add your name and email to our PPP waiting list and be the first to know when new funding is available.
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