Article originally published on March 13, 2018.
A shortage of business capital is kryptonite to any startup company. But for entrepreneurs with a dream — and a down payment — a U.S. Small Business Administration loan* can swoop in and save the day.
Think of the SBA loan program as the superhero of small business financing: able to leap tall financing hurdles in a single bound. While SBA loans are frequently used by established businesses (when longer or blended terms, or different collateral requirements are desired), there can be specific advantages for startups that merit consideration.
While the SBA does not lend directly to small businesses, banks receive a guarantee that the government will repay a portion of the loan if the borrower defaults on payments. This backing incentivizes banks to consider funding viable business concepts that may be considered inherently more risky for a variety of reasons, such as less than two years in business, change of ownership, or operating in a particular industry segment.
The SBA offers a variety of loans for small businesses, each with its own super strengths to meet your startup’s specific needs. Here are six SBA loans to consider.