Exploring SBA Loans

Even during tough economic times, the winter holiday months are marked each year by increased sales and consumer spending. Small businesses can take advantage of this time by seeking a small business loan to help keep operations thriving.

The US Small Business Association (SBA) offers three main types of loans to businesses that meet certain size requirements for their industry, are creditworthy, and have exhausted traditional lending options.

Three main types of SBA loans include:


Microloans – Small loans up to $50,000. SBA Microloans are provided by intermediary lenders that usually require a personal guarantee and collateral.

504 Loans – Large, long-term loans for equipment and existing real estate. 

7(a) Loans – Loans from guaranteed lenders best for working capital. 7(a) can be used to purchase real estate, furnishing, supplies, and equipment. 7(a) loans can also be useful for refinancing existing business debt.

Maximum interest rates and repayment terms vary, but a key benefit of an SBA loan is that they are guaranteed by the government, which covers 85% of a defaulted loan up to $150,000 and 75% for loans greater than $150,000.

Documents you may need for your small business loan application:

In addition to a business plan, articles of incorporation, copies of contracts with other businesses, and leases, SBA lenders may require a verifiable personal background statement. Keeping organized personal and business tax records when applying for a small business loan is always beneficial. It is also essential to keep balance sheets and detailed accountings of profit and loss. 

Seeking an SBA Loan during the holiday season can be an excellent opportunity to revitalize your small business for the next fiscal year.

If you need legal assistance and want to know whether your small business is eligible for an SBA loan, contact us at 202-505-5309 or info@thesjslawfirm.com to book a consultation.