The United States Small Business Administration (SBA) offers a variety of loan programs designed to support small businesses. These programs provide accessible financing and flexible options to help small businesses grow and succeed. In this article, we will explore in detail five types of SBA loans in Puerto Rico: 504 Loans, 7(a) Loans, 7(a) Small Loans, SBA Express, and Microloans.
504 Loans
504 Loans provide long-term, fixed-rate financing for significant fixed assets that promote business growth and job creation. These loans are ideal for long-term investments and offer favorable terms.
- Purpose: Financing for commercial growth and job creation.
- Eligibility: Businesses with a net asset size of up to $15 million and an average net income of up to $5 million in the last two years.
- Use of funds: Land acquisition, construction, renovation, and purchase of fixed capital equipment.
- Loan Amount: Maximum of $5 million for regular businesses, $5.5 million for manufacturing or green energy businesses.
SBA Green Loans are explained in detail in another article.
7(a) Loans
7(a) Loans are the flagship loan program of the SBA and are used for various business needs. These loans provide flexibility and competitive financing options.
- Purpose: General financing for small businesses.
- Eligibility: For-profit small businesses that meet the size criteria set by the SBA.
- Use of funds: Working capital, expansion, business acquisition, inventory and equipment purchase, and refinancing of commercial debts.
- Loan Amount: Up to $5 million.
7(a) Small Loan
7(a) Small Loans are an option for small businesses in need of financing on a smaller scale.
- Purpose: Financing on a smaller scale.
- Eligibility: For-profit small businesses that meet the size criteria set by the SBA.
- Use of funds: Working capital, inventory and equipment purchase, refinancing of commercial debts, and support for lines of credit.
- Loan Amount: Up to $350,000.
SBA Express
This program offers a quick decision within 36 hours of application.
- Purpose: Fast financing for small businesses.
- Eligibility: Businesses that meet the SBA size criteria.
- Use of funds: Working capital, inventory and equipment purchase, refinancing of commercial debts, and support for lines of credit.
- Loan Amount: Up to $500,000.
Microloans
Microloans are available through certain nonprofit and community-based organizations with experience in lending and business management assistance. Individual requirements may vary.
- Purpose: Financing for small businesses and nonprofit organizations.
- Eligibility: Small businesses and nonprofit organizations that meet the size criteria set by the SBA.
- Use of funds: Working capital, inventory purchase, equipment and supplies acquisition, and improvements to the commercial premises. Cannot be used to pay existing debts or purchase real estate.
- Loan Amount: Up to $50,000.
SBA loans are a valuable option for small businesses seeking financing. Each type of loan offers specific benefits and requirements. Be sure to carefully assess your needs and meet eligibility criteria before applying for an SBA loan. It is recommended to contact your regional SBA office.
