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Government Financing Programs

Filed under Getting Financing. Fact checked on January 18, 2013.

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When you need financing for your business, Uncle Sam might be just the man for the monetary job. Despite its uncertain future, the SBA still offers entrepreneurs important financing options.

For many small businesses, government assistance can make the difference in getting the money they vitally need to start, continue or expand operations.

Now might be just the time to ask what your country can do for you.

Financing Through the SBA

The Small Business Administration (SBA), a federal agency, offers a number of financing and operations assistance programs to small businesses. The programs include:

  • loan guarantees
  • training and educational programs
  • advisory services
  • publications
  • financial programs
  • contract assistance

Depending upon your area, state and local governments also offer an array of financing assistance.


The SBA has offices located throughout the country. To find the branch nearest you, visit or call (800) 8ASK-SBA.

Recent Changes in SBA Programs

Although the SBA has existed for almost 60 years, the agency is subject to frequent changes in funding and program policies. These changes often affect the availability of SBA loan guarantees. While access to seed capital for small businesses is the raison d'etre of the agency, recent years have diminished the number of banks offering SBA guaranteed loans considerably.

What the SBA Does—and Does Not—Offer Entrepreneurs

In the area of entrepreneurial development, the Small Business Development Centers (SBDC), SCORE and Women's Business Centers (WBDC) were recently reauthorized but seem to always be on the chopping block.

Considerations for Special Populations. Several web sites have recently been created by the SBA to address special concerns of certain types of small business owners. These include one aimed veterans and military families and another targeting women-owned businesses. The main site also has a feature that provides for translation into over sixty languages.

SBA Financing Programs

Currently, there are three basic financing programs available through the SBA: 

  • the Microloan program for small business up to $50,000, though most average around $13,000
  • the Section 7(a) loan guarantee program
  • the Section 504 Community Development Corporation program

All SBA guaranteed loans are done through the agency's lending partners (lenders, community development organizations and microlending institutions). The SBA does not loan funds directly.

The Microloan Program

The Microloan program is perhaps the most accessible to startup businesses. SBA Microloan funds go to approved, nonprofit organizations that accept loan applications and make loan decisions.

The 7(a) Program

The Section 7(a) loan guarantee program includes a variety of separate specialized programs ranging from everything to rural business loans to funding for community-focused businesses. The once-popular "LowDoc" program, which required less paperwork, is currently defunct.

The 504 Program

The Section 504 program involves SBA participation in private, nonprofit companies (Certified Development Companies or "CDCs") established for the purpose of providing long-term, fixed-asset financing to small businesses.

Considering the Future of the SBA and Your Financing

Like every government agency, the amount of resources allocated to the SBA—and its sheer existence—remain in question. While SBA-guaranteed loans are certainly worth exploring, planning on using them five or ten years from now is a risky gamble.

Because many commercial lenders may not be willing to devote a great amount of additional time and expense to secure an SBA guarantee on a small commercial loan, the administrative burden will eventually fall upon the you, small business applicant. This trend reinforces the need to develop and submit a strong business plan to the lender and to take an affirmative role in packaging an application.

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