What is an SBA 7(a) Rural Business Loan? The Small/Rural Lender Advantage (S/RLA) initiative is designed to accommodate the unique loan processing needs of small community/rural-based lenders by simplifying and streamlining loan application process and procedures, particularly for smaller SBA loans. It is part of a broader SBA initiative to promote the economic development of local communities, particularly those facing the challenges of population loss, economic dislocation, and high unemployment.
For more information on SBA 7(a) loan guarantees.
What is a SBA 504 Loan? The 504 Loan Program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization. 504 loans are made available through Certified Development Companies (CDCs), the SBA's community-based partners for providing 504 Loans. The servicing CDC for Nacogdoches County is located in Tyler, Texas.
504 Loans are typically structured with SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing10% of the project costs. Under certain circumstances, a borrower may be required to contribute up to 20% of the total project costs.
Maximum loan amount: While there is no maximum project size, the maximum SBA loan amount (debenture) is $5 million. Small manufacturers or specific types of energy projects (as described in the energy project section) may qualify for a $5.5 million debenture.** Generally, a business must create or retain one job for every $65,000 guaranteed by the SBA. Small manufacturers must create or retain a ratio of one job for every $100,000.
For more information on SBA 504 CDC loans.
The Business and Industry Loan Guarantee program guarantees loans made by eligible local lenders to businesses to benefit rural areas. The program’s primary purpose is to create and maintain employment and improve the economic and environmental climate in rural communities.
This is achieved by expanding the existing private credit structure capability to make and service quality loans to provide lasting community benefits. USDA Rural Development typically guarantees losses of up to 80 percent of the original loan amount. Inability to obtain other credit is not a requirement.
The Business & Industry Loan Guarantee program is managed by the U.S. Department of Agriculture.
For more information on USDA's Business & Industry Loan Guarantee Program.
The Microloan Program provides small, short-term loans to small business concerns and certain types of not-for-profit child-care centers. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries make loans to eligible borrowers. Microloans may be used for the following purposes:
Proceeds from a microloan cannot be used to purchase real estate.
Maximum loan amount: $50,000, but the average microloan is about $13,000.
For more information on SBA's Micro Loan Program.
For more information on these or other loan programs, please contact:
Brian McClain, Director
Angelina College Small Business Development Center