Do You Qualify for a Small Business Loan?

You have a small business and your looking to expand, refinance, acquire more capital, ect. You need a small business loan, but you’re not sure if you qualify.

Well first lets decide if you’re actually a small business. According to the U.S. Small Business Administration the following characteristics are those of a small business:

• Organized for profit
• Has a place of business in the U.S.
• Operates within the U.S. making significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor
• Independently owned and operated
• Not dominant in its field on a national basis

In addition to this list, your business must use SBA size standards to be selected as a small business, which depends on your number of employees over the past 12 months and receipts for the past three years.

Once you determined that you are indeed a small business, it’s time to see if you qualify for a small business loan:

• Net worth must not exceed $7.5 million
• Average net income over the last 2 years must not exceed $2.5 million
• Business must be operated for profit and located in the U.S.
• Owners must be U.S. citizens or resident aliens
• 51% or greater percentage occupied by owner operated business

If you fit all these requirements and are looking for a small business loan, Newtek is here to help!

Newtek is the number one non-bank lender in the country. Financing small businesses from $50,000-$10 million. We have lent over half-a-billion dollars to over 800 U.S. based small businesses. Whether you’re expanding, refinancing your existing debt, or acquiring new equipment, Newtek provides financing solutions to help you grow your revenue or improve your cash flow with 25-year amortization schedules.

SBA 7a Loan Program

The Small Business Administration (SBA) has quite a few different loan programs that entertain all different kinds of small business structures.  The SBA’s flagship loan program is their 7(a) loan program.  The SBA 7(a) loan program is for small businesses that cannot be approved for a conventional bank loan and are looking to buy a business, start a business, or grow a business with purchasing equipment, software, and other assets.  The SBA does not directly lend SBA 7(a) loans to the business community.  The nations SBA certified banks and lending institutions have that responsibility

You must first be turned down for a traditional bank loan before you can apply for one of the SBA’s 7(a) loans

In order to be approved for any kind of SBA 7(a) loan, you must have a good business credit score with all three business credit reporting agencies, a well written business plan, and a business loan application that has proper financials.

Get started building your business credit

Allow for a professional business plan writer create your business plan

The SBA has an array of SBA 7(a) loans.  All of them serve a different purpose and entertain different business scenarios.

SBA 7(a) Express Loan Programs
These loans are for a certain sort of small business borrower and can be approved much faster then other  SBA loans

SBA Express – This program gives small business owners and entrepreneurs an accelerated turnaround time for SBA underwriting review.  A response to an SBA express loan will be turned around within 36 hours.

Community Express – This loan allows for government guaranteed banks and lending institutions to offer a unique but extremely valuable combination of financial and technical assistance to small businesses that are located in under-served areas of the United States.  These loans are $25,000 or less and are meant for individuals that are looking to start a business.

Patriot Express – This loan program is dedicated to small businesses that are 51% or more owned by United States veterans or current military members.

SBA 7(a) Export loan Programs
These loan programs are dedicated to US small businesses that export products over seas.  70% of small business in the US that export products have less then 20 employees.

Export Express – This loan program helps small businesses start or grow their export efforts within the United States.  These loans or lines of credit are capped at $250,000.  The underwriting guidelines for this loan are decided by each bank or lending institution.

Export Working Capital Program – This loan program is for small businesses that have the capacity to grow their export markets and need additional capital to do so.  Interest rates and underwriting guidelines are determined by the SBA lender.

International Trade Program – This loan program is for small businesses that are looking to start or continue exporting but have been directly affected by imports.  The funds from this loan must put the small business in a position to better compete in the exporting markets.  This loan program caps at $1.75 million.

Rural Lender Advantage Loan Program
This program is more for lenders then it is borrowers.  This program assists small community SBA lenders to streamline the unique application process of small rural community areas within the US.  This program is apart of a larger initiative to promote economic growth in smaller rural communities with a focus on communities that have suffered high unemployment, natural disasters and other natural and economic conditions.

Special Purpose Loan Programs
The SBA has a few different special loan programs for small businesses that have been affected by NAFTA, to provide financial support to employee stock ownership plans, and to help assist with population control.

CAIP - The Community Adjustment and Investment Program loans are for US companies to pay SBA loan fees.  Certain SBA loan fees depending on the loan amount can be quite large.  These loans help pay for those fees.

CAPLines – CAPLines is an umbrella program that helps small businesses meet their short-term and cyclical working-capital needs.

Employee Trusts – This program is dedicated to the financial assistance to Employee Stock Ownership Plans.

Pollution Control – These loans are 100% dedicated to small businesses that have to deal with pollution waist.