Entrepreneurs without a ton of cash or access to affordable financing may want to consider an SBA loan. Backed by the U.S. Small Business Administration, these loans provide financing to start, expand or rebuild a small business.
“The whole idea of SBA loans is to help businesses who otherwise couldn’t get funding, get funding,” says Carolyn Katz, a mentor with Score, an SBA-sponsored nonprofit which provides free mentoring to small-business owners.
The SBA was created in the aftermath of the Great Depression and World War II to prop up small businesses by providing counseling and loans. The agency has since added specialized programs to support businesses owned by women and members of minority groups and offered financial relief during times of national crisis.
At the start of the Covid-19 pandemic, the SBA rolled out the Paycheck Protection Program, which offered low-interest, potentially forgivable loans to millions of small-business owners. That initiative has since expired, but regular SBA loans are still available.
Here’s what there is to know about SBA loans, including how much they cost, who qualifies and how to apply.
