Each year, thousands of American business owners turn to the SBA for business financing. However, not all loans offered through this agency are the same. So, what are the most popular SBA loans?
What Are the Most Popular SBA Loans?
The Small Business Association (SBA) offers a vast array of financing alternatives, ranging from microloans to loans that give entrepreneurs access to millions of dollars they can use to purchase land or buildings.
However, the most popular SBA program is the 7(a) program. Take, for example, these figures from fiscal year 2021:
- SBA delivered $36.5 billion in 7(a) loans, representing nearly 52,000 loans
- $8.2 billion delivered through the 504 program, representing 9,600 loans
The popularity of 7(a) loans is due in large part to their versatility. 7(a) loans can be used for a variety of purposes, including:
- Purchase land or buildings
- Purchase and install fixed assets
- Construct new buildings
- Purchase inventory and supplies
- Working capital
- Refinance some outstanding debts
For more information about 7(a) loans, take a look at this previous blog post: “Some Frequently Asked Questions About 7(a) Loans.”
About 504 Loans
Although they are not as popular as 7(a) loans, 504 loans are the way to go if you want to purchase major fixed assets. This includes things like:
- Existing buildings or land
- New facilities
- Long-term machinery and equipment
504 loans can also be used to improve or modernize the following:
- Land, streets, utilities, parking lots, and landscaping
- Existing facilities
Unlike 7(a) loans, 504 loans have a narrower scope. For example, 504 loans CANNOT be used for working capital or to purchase inventory, to consolidate or refinance debt, or for speculation/investment on real estate.
Whether you are interested in SBA loans or other types of business financing, Gellyfish Commercial can help.
To learn more about our financing solutions, check out our previous posts, “How To Get Equipment Financing?” “Bridge Loans: The Ultimate Guide,” and “Are Revenue-Based Loans a Good Option if You Have Bad Credit?”
Gellyfish Commercial: SBA Loans and Beyond
Looking for business financing that combines flexibility and certainty of execution? Gellyfish Commercial is the answer!
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