Last month the U.S. House of Representatives voted to save the SBA 7(a) Loan Program, which had previously been suspended after reaching the annual limit of $18.75 billion. Furthermore, the annual limit was raised to $23.5 billion for the popular program.
U.S. Small Business Administrator Maria Contreras- Sweet issued a statement thanking the House and Senate for helping to keep the flagship lending program on track. She was quoted as stating “We have seen record levels of lending this year, showing us that America’s small businesses are thriving and yearning to grow. We have streamlined our processes, reduced fees, and bolstered our outreach to our lending partners.”
Under the program, which has been tremendously valuable to entrepreneurs, the SBA guarantees up to 85% of the amount of the loan. Without it many small businesses would not be able to obtain loans.
According to the SBA web site eligibility information, the SBA doesn’t specify what businesses are eligible, but it does outline what businesses are not eligible. However, there are some universally applicable requirements for eligibility as follows:
- Operate for profit
- Be small, as defined by SBA
- Be engaged in, or propose to do business in the United States or its possessions
- Have reasonable invested equity
- Use alternative financial resources, including personal assets, before seeking financial assistance
- Be able to demonstrate a need for the loan proceeds
- Use the funds for a sound business purpose
- Not be delinquent on any existing debt or obligations to the U.S. government
For more information on ineligible businesses or how to apply for a loan visit sba.gov