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2023 Small Business Loans: How To Qualify For Them

Small Business Loans [Photo: The Business Journals]
Small Business Loans [Photo: The Business Journals]

Small business loans are provided by banks and lenders and partly by the government. In this article, learn more about how to qualify for them!

Small Business Loans [Photo: MARCA]

Small Business Loans [Photo: MARCA]

The Small Business Administration (SBA) loan program is an initiative supported by the federal government. It provides small businesses with financial assistance through loans. This program was launched to help small businesses with the finances they need to start, maintain, and expand their operations. The SBA works with lenders like banks and credit unions to provide the funds. These lenders provide SBA-guaranteed loans to small businesses with more advantages than they would have offered on their own. 

According to an article from the Ultimate Business Capital, there are different types of SBA loans. These include the most popular 7(a) loans which can be used for working capital and equipment and real estate purchases. There is also the 504 loan which is specifically used for purchasing or constructing major and real estate equipment. Microloans, on the other hand, are a smaller amount of loans. Usually, these loans are only up to $50,000 which can be used for start-ups and very small businesses. Lastly, the disaster loans are for businesses affected by a natural disaster. These loans are used to fund the cost of repairs and rebuilding.

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Who is eligible for these business loans?

An article in NerdWallet says that the loan requirements for SBA depend on the lender and the program itself. However, regardless of the lender and the program, one must meet specific eligibility requirements. A borrower must operate a for-profit business in the U.S. The borrower must have invested an equity like time and money into their business. They must also be able to show that they need financing and the purpose for which the funds will be used. Most importantly, the business must be small as what is defined by the SBA.

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