Running a small business during financially turbulent times can be extremely trying. But, monetary aid, specifically small business loans, can definitely make things easier for both the business and its employees. Funded and guaranteed by the federal government, 7(a) loan programs have been designed by keeping business-owners’ best interests in mind. Here are answers to some commonly asked questions regarding small business loans:

What is an SBA loan?

Loans by the Small Business Administration (SBA) are guaranteed business loans that are given to small businesses by participating lenders. Since these loans are guaranteed by the federal agency, they are much more manageable than those provided by private agencies. SBA loans also have the added advantage of lower interest rates. These loans are available in a broad range in order to suit specific business needs. You can get a loan that ranges anywhere from $500 to $5.5 million to fund your entrepreneurial adventure. Further, the loan can be accessed in the form of fixed assets or working funds.

Types of SBA loans

SBA loans are available in many types. Some of them include—SBA flagship loans, microloans, SBA disaster loans, and 504 loans, among others. Each of these loans comes with different funding criteria.

What makes SBA loans beneficial?

The money for SBA loans is funded by banks, private-sector companies, and other lenders, but the SBA guarantees a portion of these loans, which means that if you fall short on your payment, then the federal agency has you covered. This gives you the flexibility to take the loan for longer periods with lower monthly payments.

What are the eligibility criteria to apply for an SBA-guaranteed business loan?

Needless to say, the SBA has a set of strict standards by which it chooses its borrowers. They have four basic conditions:

• The owner of the business should have invested their own time and money
• The business located and operates in the country
• The business must have exhausted all other financing options
• The company must be a profit-making one

The guaranteed business loans are also given to businesses based on their income, ownership, and operational area, among other criteria.

How do you apply for a guaranteed business loan with the SBA?

Applying for an SBA loan is rather simple. The process requires you to visit SBA’s official website, where you can access the loan application checklist that contains the list of all the documents that are required to apply for a business loan.

You can also apply for a loan through SBA’s financing platform, which is known as SBA Express. If your credit and financial situation are in order, then the SBA can even fast-track your loan request.

You can also apply for a guaranteed business loan through a bank. But, this would require extensive research on your part to verify which banks are known for processing SBA loans and their terms and conditions, among other details.