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Small Business Administration (SBA) 7(a) loans are provided by participating lenders, such as banks and credit unions, and are guaranteed by the SBA. The purpose of the 7(a) loan program is to help small businesses obtain financing when they may not be eligible for traditional loans from banks.
The 7(a) loan program offers a wide range of loan types, including term loans, lines of credit, and export loans. The terms of the loans vary, but generally, they have long repayment terms and low interest rates compared to traditional bank loans.
The SBA also offers a variety of other loan programs under the 7(a) umbrella, including the SBA Express Loan program, which provides faster turnaround times for loan applications, and the Community Advantage program, which helps small businesses in underserved communities access capital.
SBA 7(a) Loans are their most popular form of funding, and the process of acquiring one can be arduous and long. However, they’re typically the least expensive form of funding available. To qualify, your business must meet several eligibility requirements, including some annual revenue, must show how you plan to use the money, and your credit score will need to be strong. There’s no stated minimum credit score according to the SBA, but the application process is intended to weed out the companies most likely to default, meaning that taxpayer dollars are used to repay the debt.
