Small Business Administration – How to Apply for SBA Loan

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Small Business Administration provides substantial educational info with a specific focus on assisting small businesses to develop and grow. The company has numerous tools for businesses that can be accessed on its website, including a small business planner and additional training programs.

Small Business Administration

Small Business Administration

The SBA was established by President Dwight Eisenhower when he signed the Small Business Act in the summer of 1953. It replaced the Reconstruction Finance Corporation (RFC), which was set up under President Herbert Hoover in after the Great Depression.

Furthermore, the newly-formed SBA’s mandate was to aid and protect the country’s small businesses and ensure they get a fair portion of government contracts and surplus property sales.

 What Is the Small Business Administration?

Small Business Administration (SBA) is a U.S. government agency that is designed to bolster and promote the economy by assisting the country’s small businesses. It was founded in 1953. SBA’s largest function is to counsel individuals who want to start and grow their own businesses.

However, it provides a series of tools on its website to assist new and existing small business owners. The agency is headed by an administrator and deputy administrator and also has a chief counsel for advocacy and an inspector general. The SBA has at least one office in every state.

SBA Services

SBA offers the following services to small businesses:

Access to Capital: The agency provides a variety of financial resources for small businesses. Financial services like micro-lending, or small loans are offered to those who wouldn’t otherwise qualify for financing. These loans are offered by partner banks, credit unions, and other financial institutions.

Entrepreneurial Development: This is driven by counselling services and low-cost training offered by the Agency. The service is available to both new and existing business owners in over 1,800 locations across the United States.

Contracting: The Agency reserves 23% in government contracting dollars for small businesses with the help of other federal departments and agencies. However, the agency guarantees 5% of these contracting dollars for women and another 3% for business owners who are disabled and veterans.

Advocacy: The company acts as an advocate by reviewing legislation and protecting the interests of small business owners across the country. Its advocates are present business owners at the state and federal government levels.

 The SBA Loan Program

The loan programs offered through the SBA are part of the most visible elements the agency provides and come with longer repayment periods for small businesses. However, the company doesn’t actually issue loans—with the exception of disaster relief loans. Instead, loans are backed or guaranteed by the SBA and issued directly by lenders that meet the agency’s guidelines.

Type Of SBA Funding

Small business owners were among some of the hardest hit during the pandemic. So, the SBA helped these owners, by providing them with two different types of funding.15 These included the:

Economic Injury Disaster Loan (EIDL): The loan was designed for businesses to use approved funds for working capital and other day-to-day expenses. So, since capital is loaned, it must be repaid.

EIDL Advance Programs: Funds are given to people who filed for EIDL assistance as long as they meet certain criteria. And unlike the loan program, funds approved through this program don’t have to be repaid.

SBA Loan Application

Once you have decided to apply for a loan guaranteed by the SBA, you will need to get the appropriate documents for your application. The SBA does not provide direct loans. So, the application process starts with your local lender, working within SBA guidelines.

Just make sure you have everything the lender will ask for to complete your application. Once your loan package is complete, your lender will submit it to the SBA. To begin the application process, you will need to complete an SBA loan application form.

How to Apply for SBA Loan

To get the application form kindly visit their official website at https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/general-small-business-loans-7a/7a-loan-application-checklist%20

You will see the SBA loan application section,. To access the form, click on the link in the section.

How to Apply for SBA PPP Forgiveness Loan

A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. You can apply for forgiveness any time up to the maturity date of the loan.

So, if borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will start making loan payments to their PPP lender.

To apply for loan forgiveness:

  1. Determine if your lender is participating in direct forgiveness through SBA and complete the correct form:
  2. Explore the list of lenders participating in direct forgiveness to determine whether you must apply through SBA.

Direct forgiveness borrowers must use the SBA forgiveness portal. While borrowers whose lender is not participating, you must apply through your lender. However, your lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a lender equivalent. Your lender can offer further guidance on how to submit the application

How to find the nearest SBA Branch

To find the nearest branch do the following

  • Go to SBA official website
  • Tap on Menu
  • Select find nearest SBA tab
  • Enter ZIP Code
  • Click on the search button.

These are steps to find the nearest SBA branch.

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