fbpx

Understanding SBA Loan Types

The U.S. Small Business Administration (SBA) offers an array of loans designed to give entrepreneurs a boost when starting or growing their businesses. 

These loans feature favorable interest rates, extended payback terms, and flexibility in use of proceeds. With the myriad types of loans available and complex applications, many small business owners turn to an SBA loan specialist like Benetrends to help them navigate the process.  

As seen in the recent post, SBA Loans: What They Are and How to Get Them,  understanding SBA loan types is an important step. Here is a look at the most common SBA loans, their criteria, uses, interest rates, and details. 

 7(a) Loans 

These are the most popular SBA loans and provide the lender with a high degree of flexibility in their use. They are especially helpful for business owners who need working capital.


  

CDC/504 Loans 

This is the SBA's version of a commercial real estate loan, though it can be used for some other purposes. The borrower's business must occupy at least 51 percent of the space. The program involves two loans. The primary loan from a traditional lender (50%), a secondary loan from a Certified Development Company (40%) and the balance as cash injection from the borrower (10%). 

 

 Microloans 

For business owners who need small amounts of cash, microloans are a smart option, with repayment terms up to 6 years. Unlike other SBA loans, microloans are not guaranteed by the agency. 

 

  CAPLines 

This is the SBA's version of a line of credit, providing short-term capital. There are four types of CAPLines to help businesses with:

    • Seasonal increases in inventory, labor, or accounts receivable 
    • Materials and labor for assignable contracts 
    • Contractors and home builders  
    • Converting short-term assets (e.g. pending invoices) into cash



Understanding the differences between SBA loan types and how to navigate the application process is a Benetrends specialty. With over 35 years of experience with small business funding, Benetrends has the experience and expertise to help you select and apply for the loan that works best for your business. Schedule a consultation to learn more.

By accepting you will be accessing a service provided by a third-party external to https://www.benetrends.com/

  • 1684 South Broad Street | Suite 130, Lansdale,
    Pennsylvania 19446

  • This email address is being protected from spambots. You need JavaScript enabled to view it.
Our Pledge to You

Our mission is to make every Benetrends client our champion. For over 35 years, our Rainmaker Plan® has been tested and proven to work, providing a means for more than 17,000 entrepreneurs to achieve their dreams of business ownership, creating both jobs and prosperity. We are so confident in the Rainmaker Plan design that we stand fully behind our work, backing every client with our Rainmaker Guarantee.

  • BBB Logo
  • ASPPA Logo
  • IFA Logo
  • IBBA Logo
  • Vetfran Logo

Information provided by Benetrends Inc. is not intended to be used as legal or accounting advice, or as the sole basis for investment decisions, nor should it be construed as advice designed to meet the particular needs of an individual investor. Please seek the advice of legal or tax professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
© 2019 Benetrends, Inc. All rights reserved. Privacy Notice.