The SBA 7(a) loan program is the SBA’s most-used loan program and a key tool for community lenders. The SBA 7(a) is a loan guarantee program, meaning a bank loans the funds to qualified applicants and the SBA guarantees a large portion of a loan, mitigating much of the risk for lenders and providing small business borrowers with access to needed capital.

Key features of the 7(a) loan program:

• Loans of up to $5 million can be made with no minimum loan amount.
• The SBA can guarantee as much as 85% on loans up to $150,000, and 75% on loans more than $150,000. (Loan guarantees have been temporarily increased to 90% until Sept. 30, 2021)
• Interest rates are set by the lender but can’t exceed SBA maximums.
• Extended terms on most 7(a) loans can ensure stronger borrower cash flow and increased ability to service debt.
• NEW in 2021: Six months of payment relief (P&I payments made by the SBA, referred to as “Section 1112 payments”) will be available for new SBA 7(a) loans. This is considered nontaxable income.
• NEW in 2021: 7(a) borrowers that were eligible for previous CARES act relief payments will receive three months of P&I payments beginning in February 2021 (capped at $9,000/month). The smallest and hardest-hit businesses may be eligible for an additional five months of P&I payments after the three-month period is over.

For more information, visit SBA General Small Business Loans: 7(a).

SBA Express loans are smaller loans with an accelerated time for SBA review. The SBA responds to the loan application within 36 hours.

• Loan amounts up to $500,000 (Temporarily increased to $1 million until Sept. 30, 2021)
• SBA guarantees up to 50% (Temporarily increased to 75% for loans under $350,000 until Sept. 30, 2021)
• Interest rates are set by the lender but can’t exceed SBA maximums.
• Revolving lines of credit up to seven years, with maturity extensions permitted at the outset

The CDC/504 loan program provides financing for major fixed assets such as equipment or real estate. The 504 program differs from the 7(a) program in that it is a loan participation program, with the SBA providing part of the loan funds. A key characteristic of the program is long-term, fixed rate financing for the SBA portion of the loan. Proceeds can be used for:

• The purchase of land, including existing buildings
• The purchase of improvements, including grading, street improvements, utilities, parking lots, and landscaping
• The construction of new facilities or modernizing, renovating, or converting existing facilities
• The purchase of long-term machinery and equipment

For more information, visit SBA Real Estate and Equipment Loans: CDC/504

A borrower located in a rural community may qualify for special financing through the U.S. Department of Agriculture (USDA). The (B&I) Guaranteed loan program provides guarantees of up to 80% of a loan made by a commercial lender. Proceeds for a B&I loan can be used for:

• Working capital
• Machinery and equipment
• Buildings and real estate
• Certain types of debt refinancing

For more information, visit USDA Business & Industry Loans.

This temporary program was created by the CARES Act to help rural businesses and ag production facilities with working capital loans that cover costs to prevent, prepare, and respond to the coronavirus pandemic. The loans offer a 90% loan guarantee and repayment terms up to 10 years. Loan principal payments may be deferred for up to three years from the loan closing.

For more information, visit USDA B&I CARES Act Program.

Essential community infrastructure is key in ensuring rural areas enjoy the same basic quality of life and services enjoyed by those in urban areas. Community facilities programs offer direct loans, loan guarantees, and grants to develop or improve essential public services and facilities in communities across rural America. These amenities help increase the competitiveness of rural communities in attracting and retaining businesses that provide employment and services for their residents.

This program provides funding through grants, direct loans, and guaranteed loans for clean and reliable drinking water systems, sanitary sewage disposal, sanitary solid waste disposal, and storm water drainage to households and businesses in eligible rural areas.

This program provides guaranteed loan financing and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements.

Funds may be used for renewable energy systems, such as:

• Biomass (biodiesel and ethanol, anaerobic digesters, and solid fuels)
• Geothermal for electric generation or direct use
• Hydropower below 30 megawatts
• Hydrogen
• Small and large solar or wind generation

Funds may also be used for energy efficiency improvements to things such as HVAC systems, insulation, lighting, cooling and refrigeration, doors and windows, and equipment.

These programs provide direct loans and loan guarantees to increase the supply of affordable rental housing for low- and moderate-income individuals and families in eligible rural areas and towns. Complexes may contain units that are detached, semi-detached, row houses, or multi-family structures.

Requirements include:

• Rent is capped at certain levels based on area median income
• Complexes must consist of at least five units