Loans from the U.S. Small Business Administration (SBA) are often desirable for small business owners due to their favorable rates and terms. So you’ll be happy to know the SBA is testing two pilot programs that might be able to give your business a boost.
First is the Express Bridge Loan (EBL) Pilot Program. This program is intended to supplement the SBA’s disaster loan options, and allows 7(a) Lenders to deliver SBA-guaranteed financing on an emergency basis for disaster-related purposes.
This funding will be expedited and is intended to support businesses impacted by Presidentially-declared disasters in the short-term, while they wait for longer-term financing. The maximum loan amount is $25,000, with up to half that amount guaranteed by the SBA.
To qualify, your small business must have been located in a Primary County or Contiguous County that has been Presidentially-declared as a disaster area. And the loans are only eligible for businesses that had already established a banking relationship with the SBA Express Lender as of the date of the applicable disaster.
The loan funds can only be used to support the survival or reopening of the small business. The loan approval process should be started as soon after the disaster as possible, because the entire process needs to be buttoned up no later than six months after the disaster occurs.
The SBA’s second pilot program is called Community Advantage. The primary goal of Community Advantage is to provide affordable credit to those who wouldn’t qualify for traditional financing. It’s an alternative path for building a business, providing services like business plan preparation, market research, accounting services, and payroll.
Community Advantage connects mission-based lenders with access to 7(a) loan guarantees that reach as high as 85% on loans up to $250,000. The idea is that by kickstarting a business with all this funding and resources, the sustainability dramatically improves.
To qualify for the Community Advantage program, you need to be a for-profit business in an underserved market that can meet the SBA’s standards. While your credit history and business viability will be reviewed, these loans are not dependent on the size of your balance sheet or the amount of collateral you possess. Rather, it will come down to have a solid business plan and qualifications that match what the SBA has laid out for the program.