SBA Loan Requirements – Everything You Need to Know

Feb 25, 2019

SBA Loan Requirements – Everything You Need to Know

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When it comes to small business loans, the US Small Business Administration (SBA) isn’t just a federal agency. It’s an institution. For example, in 2017 the SBA helped connect entrepreneurs with 68,000 loans through the 7(a) and 504 loan programs alone. These 2 programs provided a total of $30 billion to American small businesses.

Overall, funding is up for minority and female entrepreneurs. This increase is crucial because disadvantaged entrepreneurs often struggle to qualify for financing through other channels. For example, when you look at the $85 billion invested by venture capitalists in 2017, businesses led by women only received about 2% of that total. And when minorities seek a business loan, research reveals they’re 3 times more likely than their white counterparts to get rejected.

In addition to their admirable parity, SBA loans are highly sought after because of their favorable rates and terms. An SBA loan is on par with the most lucrative financial products from big banks but is easier to acquire and more compatible for those beginning in business. The reason for this is that banks will want to see an established track record before approving a loan, while that’s not necessarily an SBA loan requirement.

This entrepreneur-friendly approach is no accident. The federal government set up the SBA to help more small business get up and running, which, as any entrepreneur knows, is a challenging thing to do. So the SBA serves as a spark plug for small businesses, which in turn strengthens our national economy.

About the Author

Grant Olsen

Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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