What Are Some Good Small Business Startup Loans?


As of 2015, the Small Business Administration's 7(a) loan program, 504 loan program and 7(m) microloan program are good small business startup loans, as Entrepreneur reports. Small startups with net worth below $7 million and net incomes below $2.5 million that meet other requirements qualify to apply for the 7(a) and 504 loan programs, while all new business owners may apply for the 7(m) microloan program.

Qualifying 7(a) loan applicants receive up to $750,000 from local lenders as of 2015, according to Entrepreneur. SBA guarantees part of the loans, which encourages lenders to offer financing to small business owners. Loan applicants often use 7(a) loans for leasehold improvements, asset purchases and working capital. Banks generally approve startups with financial statements covering two to three years of business operation and partial owner's equity in the business.

504 loans cater to the needs of business owners who want to purchase assets. Lenders fund these loans in conjunction with other loans provided by certified development companies, as Entrepreneur explains. The SBA guarantees up to 40 percent of an asset's value.

For small business owners, 7(m) microloans are a source of small loans for a variety of business growth or improvement purposes, as noted by Entrepreneur. SBA directly provides the loans through nonprofit community-based organizations. Applicants have to take technical assistance classes offered by the organizations to qualify for the microloans.

Related Videos