Tapping the SBA, Part 1: What Works for Your Business?

The Small Business Administration (SBA) offers a series of loan products that could benefit your business, whether you’re just starting out or looking to expand. To navigate the choices, consider your business type and size and the purpose of your potential loan.

The SBA is a governmental agency dedicated to supporting small business growth, which creates jobs that help fuel the economy.  In fact, in January 2012 President Obama gave the SBA Administrator cabinet-level status.  Michael Amon, senior vice president and government guaranteed lending manager at Regions Bank explains that, as part of its mission, the SBA “works with banks to help support lending to borrowers that potentially wouldn’t qualify otherwise.”

The SBA does not make small business loans itself, but with its banking partners, the SBA shares the risk that comes with lending money to a new or growing business.

A typical candidate for an SBA loan is growing and has demonstrated an ability to create cash flow and meet its obligations, but it may not have significant capital.  “The SBA programs enable a growing company to finance its growth,” says Amon.

The SBA 7(a) loan program, which helps startups and existing small businesses with financing for a variety of general business purposes, is the SBA’s most popular program.  Other SBA loan programs include the Microloan Program, which provides for  small, short-term loans; the CDC/504 Loan Program, which provides for real estate and equipment loans; and, and the Disaster Loan Program, which provides for disaster loans for businesses of all sizes looking to rebuild after certain types of disasters.

Amon notes that the SBA loan products can be used by almost any type of business for a myriad of purposes.  He commonly observes businesses seeking an SBA 7(a) loan for:     

  1. Business acquisition
  2. Rent replacement (for a business looking to purchase office space in lieu of renting)
  3. Small business equipment financing
  4. Partner buyouts

When assessing SBA loan options for your company, Amon suggests leveraging your network of professionals and relying on a clearly documented business plan.  “It’s very important for business owners to have multiple business partners who help them make decisions about their company.  It is important that they leverage their relationships with their accountant, attorney and local bank, for example.  As they develop their plans for the future, they should seek counsel on the best direction for their business and the right kind of loan that might be able to help them achieve these goals,” he says.

To identify the tools that may help you start or expand your business, visit the SBA’s Loans and Grants Search tool.

Continue to Tapping the SBA Part 2.


This information is general in nature and is provided for educational purposes only. Regions makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented. Information provided and statements made by employees of Regions should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Regions encourages you to consult a professional for advice applicable to your specific situation.