While SBA loans are a powerful financing alternative for business owners, they can also be confusing to the uninitiated. If you are new to the world of SBA loans, don’t worry. This essential glossary will help you make sense of it all.
7(a) Loans
This is SBA’s most common loan program and the best alternative when real estate is involved. 7(a) loans can be used for a variety of purposes, including:
- Short- and long-term working capital
- Refinance current business debt
- Purchase furniture, fixtures, and supplies
504 Loans
Together with the 7(a) loan program, this is another of the most popular SBA’s lending initiatives. Business owners use 504 loans to purchase major fixed assets that promote job creation. There are three basic rules to qualify for a 504 loan:
- Operate as a for-profit company in the United States or its possessions
- Have a tangible net worth of less than $15 million
- Have an average net income of less than $5 million after federal income taxes for the two years preceding your application
CDC
This term stands for “Certified Development Company.” CDCs are private, nonprofit corporations that work with the SBA and private sector lenders to provide financing to small businesses.
DBA
This acronym you may find in some application forms stands for “doing business as.” It basically refers to the commercial name of your business, for example “John’s plumber service,” or “Fur-tastic Pet Shop.”
Small Business
The term “small business” is part of the name of the SBA. But what is a small business, exactly? While the concept of what constitutes a small business may vary from person to person, the SBA uses clear-cut criteria to determine the size of your business. To discover if your business is considered small by SBA standards, you can use this convenient online tool.
Finally, to get a full picture of the business loan landscape, don’t forget to check out our previous post: A glossary of loan terms for business owners.
Gellyfish: Certainty of Execution in Business Loans
Looking for SBA loans in California, or anywhere in the United States? Gellyfish is here to help. We offer financing with the certainty of execution you need to take your business to the next level.
Contact us today by email (info@gellyfishcommercial.com), telephone (877-800-4493), or social media (Facebook, Twitter, LinkedIn), to schedule a free consultation or to learn more about our full range of financing options
