The program provides borrowers an option to obtain alternative financing when conventional financing isn’t available. Additionally, an SBA loan is re-amortized annually to assist the borrower in reducing principal faster and offering easier repayment terms.
Surety Bond Guaranty
Essentially, the SBA lends indirectly through a third party, thus offering a bonding incentive for eligible contractors. This strengthens a contractor’s potential to obtain bonding and provides greater access to contracting opportunities for small businesses. Therefore, it is structured according to the use of the loan proceeds as well as the assets and collateral pledged.
Venture Capital Program
The SBA works through a Small Business Investment Company (SBIC). It is a financing alternative specific to small businesses that addresses the growth capital and requirements through the backing of the federal government. This SBA loan structure is able to more easily assist small businesses in need of debt or equity financing. The SBIC is limited by SBA regulations.