SBA Loans for Women
Women turn to the SBA for loans and grants for their business, but knowing what they offer and how to take advantage of these government funding programs will save you time and headaches.
Can I Get Free Money from the SBA?
Brace yourself for a bubble burst… there is NO free money from the SBA, but that doesn’t mean that your business can’t gain a lot of benefit from their programs. The SBA does not lend money, but it will guarantee a portion small business loans from other lenders, both traditional and non-traditional. The SBA does not grant money, but it will link sources of grants with people who want them. Additionally, loan programs are not specifically directed toward women-owned small businesses (WOSBs), but rather ALL qualifying small businesses.
How DOES the SBA Help with LOANS?
he SBA offers four guaranteed programs to assist with loans. They are:
SBA 7(a) Loan Program
Provided through standard commercial lending institutions (your local bank), this is the primary lending method for the SBA. Loans from this program are flexible to assist with a variety of business purposes, in both existing small businesses and in start-ups. There are four primary types of 7(a) loan programs, each with a number of subtypes:
- Express Programs – These provide certain key groups of borrowers such as veterans, active-duty military personnel, and borrowers from distressed communities a faster, more streamlined application process.
- Export Loan Programs – Designed to help American small businesses bring more goods to world markets, the business must have been in existence for at least one year (but not necessarily exporting), and the money must go toward enhancing development of exports.
- Rural Lender Advantage Program – Targeted to help the rural lender with infrequent SBA contact in addition to assisting the borrower, this initiative helps smaller lenders navigate simpler eligibility requirements, and provides a streamlined application process and faster turnaround time versus some other forms of loans.
- Special Purpose Loans Program – An umbrella group to cover loans to assist areas adversely affected by the North American Free Trade Agreement (NAFTA), loans for pollution control (to help a business reduce its environmental impact), and to assist Employee Stock Ownership Plans. (Note that the Pollution Control program is not always available due to lack of appropriation from Congress).
SBA CDC / 504 Loan Program
Accomplished through private, community economic development not-for-profit companies called “Certified Development Companies” (CDCs), these loans are intended for business that need “brick and mortar” financing to acquire fixed assets for modernizing or expanding (generally equipment and real estate). They are usually long term and fixed rate loans. Learn more about the SBA CDC / 504 Loan Program.
SBA Microloan Program
Also done through specially designated nonprofits, these small (less than $35,000), short term loans are to help with small-scale financing for start-up and expansion of a small business or not-for-profit childcare center. They can be used for equipment, machinery, supplies, inventory, furniture, fixtures, and working capital. The non-profit lenders also specialize in technical assistance to help these businesses succeed. Find out if the SBA Microloan Program is right for your small business.
Disaster Assistance Loan Program
Specifically for a business impacted by a declared disaster, this loan can help repair or replace assets damaged or destroyed by the disaster. This may include inventory, machinery, equipment, personal property, real estate, and other business assets. Has your business been impacted by a declared disaster? Find out more about the Disaster Assistance Loan Program.
How DOES the SBA Help with GRANTS?
The SBA is very clear in stating that it “does NOT provide grants for starting and expanding a business.” Grants are usually developed and managed by state agencies or non-profit organizations and each has it’s own set of qualification rules and application process. WomanOwned offers access to a very large (many thousands) grant database to our members as one of the benefits of joining. This one stop grant search system will help you to search by keyword, category or state to find programs that are right for you. Learn more about our Grant Database and WomanOwned Membership here.
SBA Office of Women’s Business Ownership
The SBA maintains an Office of Women’s Business Ownership, and provides resources to Women’s Business Centers (WBC) in many states in the US. Working with a local WBC will help you to tap into the resources of the SBA and to work towards successful loan application for one of the loan programs listed above. Find a WBC office in your state here.