The world of small businesses loans can often lead to confusion, as the SBA offers various programs that cover specific needs for entrepreneurs. From SBA 7a and 504 loans to Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loans (EIDL), and more, business owners need to know which program fits their needs before applying.
SBA 7a Small Business Loans
SBA 7a loans are among the most popular small business loans, in part because they offer capital that can be used for a wide range of purposes. These small business loans provide capital for startup businesses, as well as financing for equipment, inventory, and even commercial properties. SBA 7a loans can also be used by growing businesses for acquisitions and mergers. The SBA 7a program offers approved applicants up to $5 million.
The SBA 504 loan program frequently gets conflated with the 7a loans, but there are significant differences between the two. The primary uses for SBA 504 loans are large assets and projects, such as equipment, commercial property, expansions, and construction. Because SBA 504 loans are more focused and robust, entrepreneurs can apply for up to $20 million in financing for growing operations.
PPP Business Loans
Personal Paycheck Protection loans have been a hot topic over the past few months. The purpose of PPP loans is to provide much-needed relief to businesses during the COVID-19 pandemic. PPP loans were designed with forgiveness in mind, so businesses that were able to maintain operations without laying off or reducing wages for their employees would be eligible to be free of loan repayment. Even chains and franchises were allowed to apply for PPP loans, receiving funding to sustain each business location. As of last month, the Paycheck Protection Program was put on hold, while lawmakers work to form a consensus on how best to help businesses stay above water during this national crisis.
While PPP loans have been put on hold, business owners can still apply for SBA Economic Injury Disaster Loans. The EIDL program provides temporary relief to businesses that are experiencing a loss of revenue. Much like PPP loans, EIDLs are designed to provide coverage for utilities, rents, wages, and health benefits. The loans also expand to cover the agriculture sector, and applications are being accepted.
Talk to the Professionals
Whether you are launching a new business, expanding operations, or looking for relief financing, talk to the team at Nanaki Capital. We help businesses of all types navigate the different SBA loans available to find the right fit for their needs. We also have the ability to expedite SBA loan applications so you can access the financing you need much faster and with much less red tape. Contact Nanaki Capital today to get started.