FINANCING OPTIONS: SBA Loan Programs - Overview

          SBA LOAN PROGRAMS AVAILABLE TO AN APPLICANT

SBA is Congressionally-mandated to assist the nation's small
businesses in meeting their financing needs. 

This is accomplished primarily through the 7(a); Certified
Development Company (504); 7(m) (Microloan); and Small Business
Investment Company (SBIC) lending programs.  

Since the SBIC program involves lenders who provide equity 
capital in exchange for equity securities -- meaning the 
recipients give up some ownership, but not necessarily control, 
in exchange for the funds -- discussion of this program is 
omitted from this module.  Information on the SBIC program can be
found in http://www.sba.gov/inv.  

The other three lending programs do not require ownership
divestiture and constitute the SBA's business loan programs. Each
of these is discussed here and each is designed to provide small
business with the funds it needs for a particular financing need.

     The 7(A) PROGRAM is the most flexible as it can provide
     financing for a variety of general purposes, such as 
     to acquire or start up a business, or to meet very specific
     financing needs such as contract or export financing.

     The CERTIFIED DEVELOPMENT COMPANY OR 504 PROGRAM was
     established to finance a portion of a business' fixed asset
     acquisition with a fixed interest rate loan in combination
     with third party financing and equity.

     The MICROLOAN PROGRAM provides very small loans to eligible
     businesses needing limited amounts of borrowed funds.  The 
     SBA provides its funds to a micro lender who, in turn, makes
     the actual loan to the business.  

These programs constitute the selections which an applicant 
should know because they represent the choices available to the
actual small business applicant.