Support for small-business growth and development also continues to be a priority for policymakers this year. So what does that mean for small businesses?
Small-business owners have a range of financing options to consider for their specific needs, including conventional business term loans and government-guaranteed term loans. For many small businesses that need funds for a real estate purchase and expansion, or to acquire another business and manage cash flow, the SBA 7(a) term loan is a great option to consider. Here are a few quick facts on SBA 7(a) loans and what type of business should consider pursuing this financing.
Why the SBA 7(a) program?
This year, thousands of America’s 28 million small-business owners will turn to the SBA 7(a) program for financing. The U.S. Small Business Administration, which does not directly make loans, provides a guarantee for SBA loans made to small businesses by banks and other lending institutions. Because the SBA guarantees a portion of the 7(a) loan, SBA lenders are able to offer an alternative to creditworthy business owners who may not be able to obtain conventional bank financing. Anticipating growth in the program, Congress has provided the SBA with a record loan authorization for the 2016 fiscal year.