A small business needs capital to grow and finding funds can be difficult.  Financial institutions, banks, and private moneylenders usually do not offer loans without some surety in the form of collateral or co-signer.  To promote small businesses, the US Government offers federal loans to these small businesses in the form of Small Business Administration (SBA) loans.
 

Features of the SBA loans

• The SBA is an independent federal agency that offers loans to small businesses in the form of three different loan programs.  Each loan program has its own criterion that has to be fulfilled by the small businesses.  The funding is based on appropriations and is likely to change every year.
  
• The first SBA loan program is known as the SBA Business Loan Program.  In this program, SBA has authorized lending partners in the community, who offer the loans to small businesses.  The partner lending agencies are known as Lenders, Community Development Organizations, and Microlending Organizations.  SBA defines the criterion for the loan.  The partner lending agencies disburses the loan.  The SBA guarantees in part or in full the repayment of the loan to the partner lending agencies.  Armed with the SBA guarantee, which is the federal government’s guarantee, the partner lending agencies willingly give the loan to small businesses.  Thus, in this way, small businesses can fulfill their requirement of funds and can work towards the growth of their business.
  
• Small Business Investment Company (SBIC) performs the second SBA loan program.  SBIC is a partnership between the public and the private businesses.  The federal government gives low interest funds to these private businesses to be utilized as venture capital that is required by entrepreneurs.  These private businesses borrow funds from the federal government and give it to the entrepreneurs in the hope that the venture would be a success and they would earn a profit from it.  Thus, they invest and help the small businesses grow.
  
• The third SBA program loan is known as Surety Bond Guarantee Program (SBG).  This program helps small contractors to bid for large projects by giving a federal government guarantee bond in the case of default by the small contractor.  The guarantee covers the major amount of loss in case there is any breach of contract by the small contractor.  Thus, this SBG program helps small contractors to undertake big projects and thereby grow.
  

Applying online

All the above three SBA loan programs are available to any small business.  The details of each program can be availed from the offices of SBA.  They can also be obtained on the Internet.  The application forms, criteria, names and addresses of partner lending agencies, the interest rate charged, and the repayment schedules and options can be downloaded online.  You can also submit all the necessary documents online.  This enables fast processing and early disbursement of the loan.  Due to the initiative of the federal government, entrepreneurs need not take high interest business loans from traditional sources like banks and financial institutions.  Upon request, entrepreneurs may also be provided with a complete plan as to how to repay the loan smoothly and effectively.