SBA Programs and Loans

Quick Insight

The United States Small Business Administration (SBA) has many resources and lending programs for small businesses. Many educational items on their website can be used by small businesses anywhere in the world.

The U.S. Small Business Administration’s programs include help with management, as well as financial and federal contract procurement. SBA provides specialized outreach to women, minorities, and armed forces veterans. SBA loans are available to victims of natural disasters. The agency also offers specialized advice and support in international trade.

The 7(a) and 504 Loan Programs

  • At the end of fiscal year 2021, the SBA approved 31,856 loans totaling $27 billion in its 7(a) loan program, one of its largest loan programs. The 7(a) program had $104 billion in unpaid principal loan balance. In FY2021, the average approved 7(a) loan amount was $704,581, and about 10% of all 7(a) loans exceeded $2 million.
  • In the 504 program, the SBA issues debentures (i.e., bonds) to fund up to 40% of the amount of 504 project costs. The borrower and a third-party lender fund the other 60%. In fiscal year 2021, the SBA issued $709 million of debentures for 693 loans. As of March 2022, the unpaid principal balance of 504 loans was $32 billion.

In addition to loans, the SBA provides:

  • Access to Capital: The SBA provides an array of financing for small businesses. Options range from the smallest needs in microlending to debt and equity investment capital. Some of these lending options will be covered in this course. The equity investment options are not covered.
  • Entrepreneurial Development: The SBA provides free counseling and low-cost training to new entrepreneurs and existing small businesses. The best-known of these is the SCORE business mentoring program. SCORE mentors, who are experts in entrepreneurship, provide free guidance via email, phone, and video to small businesses. SCORE also has an online library of training and resources. Apart from SCORE, the SBA site is full of excellent business education resources.
  • Government Contracting: The SBA sets goals with other federal departments and agencies to award 23% in prime contract dollars to small businesses.
  • Advocacy: The SBA supports the nation's small business community by reviewing Congressional legislation and testifying on behalf of small businesses. It assesses the impact of regulatory burden on small businesses.

If you are a small business owner, entrepreneur, or advise small businesses, check out the resources on the SBA site for resources for your company or your clients' companies.

- Rob Stephens

Further Insight

CFO Perspective Resources

  • Video: Is an SBA Loan Right for You? SBA Loan Pros and Cons - I’ll explain some of these pros and cons to help you make a better decision. I'm not a lender, so I can give you an unbiased look at the plusses and minuses of SBA loans. You'll discover six benefits of SBA loans and five reasons you may decide SBA loans aren't right for you.
  • Video: SBA 7(a) Loans: Valuable Funding to Help Your Business Grow - You’ll learn who’s is eligible for a 7(a) loan, what it can be used for, the loan terms, and where do to go to get a 7(a) loan.
  • Course: SBA Loans - Funding and Resources for Small Businesses - Discover SBA loan programs and resources that could help your business. This course helps business owners and their advisors better understand the purpose of SBA loan programs, who's eligible, and whether U. S. Small Business Administration (SBA) loans are the right funding for the business.

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