Hot Take: The SBA Small Loan
With so many larger-than-life loan options for small business owners, it's easy to overlook one of the SBA's smaller loan offerings.
The SBA 7(a) Small Loan is the name for an SBA 7(a) Loan up to $350,000. The SBA offers a guarantee of 85% for loans of up to $150,000, and 75% for loans between $150,001 and $350,000. For an SBA 7(a) Small Loan, the SBA allows lenders to submit two initial forms that quickly generate a credit score based upon the business owner’s personal credit, the business, and the projected success of that business. The SBA’s “total credit score” approach – which the SBA confidently backs in terms of predictive accuracy – makes it easier and less time-consuming for banks to partner with the SBA. And faster for you!
SBA Small Loans carry much of the same loan requirements as the SBA 7(a) standard loan. However, SBA Small Loan applications will be pre-screened to determine whether or not you’re an easy approval. Your creditworthiness will be decided based on a blend of consumer credit data, business credit data, borrower financials, and the contents of your application. If you pass the pre-screen, you’ll be fast-tracked through the SBA’s E-Tran system. If you fail the pre-screen, you’ll be required to go through the more rigorous SBA 7(a) Standard Loan process instead.