Eligible and Ineligible Business Types

Most American small businesses meet the SBA’s eligibility requirements to obtain a loan. In general, the prospective loan recipient must have a for-profit enterprise doing business in the U.S., reasonable equity and have pursued alternative funding resources, including personal assets.

There are certain businesses and applicants that are eligible but face
specific restrictions or considerations. Among those are: franchises, recreational facilties and clubs, arms and agricultural businesses, fishing vessels and medical facilities such as hospitals, clinics and laboratories.

However, there are some business that are not eligible for an SBA loan.
Those include: real estate investment firms, lenders, pyramid sales
programs, gambling ventures and charitable, religious and otherwise
non-profit outfits.

The SBA’s three major loan programs also have specific eligibilty
guidelines and requirements. Here’s a snapshot of those:

Basic 7 (a) Loan Program
Applicants must meet SBA size requirements, be for-profit, ensure that the financial need exists and demonstrate the capacity for repayment. Special prgrams within the 7 (a) program may carry with them additional eligibility requirements.

CDC/504 Loan Program
Prospective loan recipients cannot have a net worth beyond $8.5 million or an average net income greater than $3 million after taces for the preceding two years.l

Microloan Program
Small business owners interested in learning about eligibility requirements for microloans should contact a microlending intermediary in their specific geographic region. These intermediaries are in 46 or the 50 states, with Alaska, Rhode Island, Utah and West Virginai the only states without. the SBA offers and exhausive, 49-page list of the nations; intermedaiaries on its website, www.sba.gov.

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