Small Business Loans
The Small Business Administration (SBA) does not make direct loans to small businesses. Rather, it sets guidelines for loans, which are then made by its partners , such as lenders, community development organizations, and micro-lending institutions. The SBA guarantees these loans will be repaid, thus eliminating some of the risk to the lending partners. When a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans are only made to a small business if the borrower has no other access to financing on reasonable terms.
Loan amounts: $500,000-$5,000,000
Eligible property types: Most property types considered
Occupancy requirement: Owner-occupied (>=51%)
Loan-to-value: Up to 90% of appraised value (100% for certain property types)
Interest Rate: 5.00-6.50%
Term: 25 years
Amortization: 25 years
USDA Loans
In order to foster the creation of jobs in rural areas, the Federal government offers a partially-guaranteed commercial loan platform called the USDA Business and Industry ("B&I") Loan program.
This program is modeled after the very successful SBA loan program. The United States Department of Agriculture (USDA) does not actually make these loans. Instead, the USDA merely guarantees qualified commercial loans made in rural areas. The loans are underwritten and made by banks. If the construction of a new building or factory will create long-term jobs in a rural area, up to 80% of the loan will often be guaranteed by the USDA.
The Farm Service Agency is an agency of the U.S. Department of Agriculture (USDA). You may be able to get a loan or loan guarantee through FSA's Farm Loan Programs if you are a farmer or rancher who is unable to obtain credit elsewhere to start, purchase, sustain, or expand your operation. Unlike loans from a commercial lender, FSA loans are temporary in nature and designed to help you eventually graduate to commercial credit. Once you are able to obtain credit from a commercial lender, the FSA's mission of providing temporary, supervised credit is complete.
The Small Business Administration (SBA) does not make direct loans to small businesses. Rather, it sets guidelines for loans, which are then made by its partners , such as lenders, community development organizations, and micro-lending institutions. The SBA guarantees these loans will be repaid, thus eliminating some of the risk to the lending partners. When a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans are only made to a small business if the borrower has no other access to financing on reasonable terms.
Loan amounts: $500,000-$5,000,000
Eligible property types: Most property types considered
Occupancy requirement: Owner-occupied (>=51%)
Loan-to-value: Up to 90% of appraised value (100% for certain property types)
Interest Rate: 5.00-6.50%
Term: 25 years
Amortization: 25 years
USDA Loans
In order to foster the creation of jobs in rural areas, the Federal government offers a partially-guaranteed commercial loan platform called the USDA Business and Industry ("B&I") Loan program.
This program is modeled after the very successful SBA loan program. The United States Department of Agriculture (USDA) does not actually make these loans. Instead, the USDA merely guarantees qualified commercial loans made in rural areas. The loans are underwritten and made by banks. If the construction of a new building or factory will create long-term jobs in a rural area, up to 80% of the loan will often be guaranteed by the USDA.
The Farm Service Agency is an agency of the U.S. Department of Agriculture (USDA). You may be able to get a loan or loan guarantee through FSA's Farm Loan Programs if you are a farmer or rancher who is unable to obtain credit elsewhere to start, purchase, sustain, or expand your operation. Unlike loans from a commercial lender, FSA loans are temporary in nature and designed to help you eventually graduate to commercial credit. Once you are able to obtain credit from a commercial lender, the FSA's mission of providing temporary, supervised credit is complete.