10 Smokin' Hot Small Business Loan Tips for the SBA

The U.S. Small Business Administration (SBA) was started in 1953 as an independent federal resource to support small business development in America. The Obama administration is a strong proponent of small business, calling it the "backbone" of the country. The SBA has received a lot of criticism in the past for not "walking their talk", but thanks to President Obama, there have been some changes implemented that make it worth the time to apply. During the perceived economic recession, it has placed $25 billion into the hands of small business owners.

The SBA currently has 1,100 Small Business Development Centers in places across the county where small business owners can receive guidance through the steps of starting a business. They are helped with acquiring the credentials needed to make them eligible to apply for loans.

The SBA networks with SCORE counselors for the benefit of small business growth. These retired business executives mentor small business owners to develop their business loan package.

The SBA supports small businesses of all types, but special focus is given to entrepreneurial companies that will eventually foster job creation. There is a program for innovation and commercialization called Small Business Innovation Research (SBIR) for businesses in this category. The SBA "fast-tracks" the paperwork for these businesses, helping them to obtain funding from investors in a timely manner.

According to an Entrepreneur interview of Karen G. Mills, the woman at the helm of the SBA, there are something like 5,000 banks that have SBA loans. These are microloans for working capital, smaller projects such as purchasing inventory or buying a building. The SBA acts as an intermediary between the bank and the business, but the business owners needs to have a clear idea of how they intend to expand their business.

Based on the American Recovery and Reinvestment Act of 2009, the SBA implemented America's Recovery Capital (ARC) loan program to help eligible small business owners ride out the recession. Some lenders will offer funding until it runs out, or until September 30, 2010, whichever comes first.

The SBA makes a point of helping small businesses in regions that have been hit with disaster, such a hurricane zones. Disaster Assistance Loans are also given to businesses affected by manmade disasters, such as the oil spill in the Gulf.

Export businesses with 20 or less employees can benefit from the SBA Export Loan programs. These are for helping small businesses develop their export activities and compete on the international market.

The CDC/504 Loan program grants fixed-rate long-term loans for a small business to acquire fixed assets, including equipment and real estate to expand or stay on the leading edge of technology that allows it to remain competitive.

The SBA offers specific assistance to women, minorities, veterans, Native Americans, young entrepreneurs and other special audiences where there are opportunity gaps. Small businesses may need to be certified to prove the nature of the business ownership.

There basic credit factors a lender will review as part of the application process for a small business loan. The SBA offers online support and in person counseling to help small business owners understand the scope of the credit requirements and prepare in advance for the application process.