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The U.S. Small Business Administration (SBA) offers guaranteed commercial loans by the federal government for small businesses. These loans are offered through approved partners in the lending industry and not directly through the SBA. When the SBA guidelines are followed and approved, the lender has less risk since a significant percentage (up to 85%) is guaranteed to be repaid. The standard SBA loan interest rates are a maximum of 2-1/4 points above the prime rate; the final rate, as with commercial loans, is based upon the risk of the borrower and determined by the assigned lender.

There are 4 basic programs offered: 2 types of business loans (Section 7-a and Section CDC/504), a Microloan and a Disaster/Assistance loan program. Each one fits a specific business financing requirement. All of the programs require the applicant to provide detailed financial documentation to prove stability and credit- worthiness. If your business is only doing marginal and you think this is easy money, then you're in for a little shock.

The following requirements are needed for any of the 4 programs and some of them need additional documentation.

1) Detailed business profile. This describes the type of business you operate, length of time in business, overall sales, location and number of employees. In this section, you tell the whole story of how you operate and paint the big picture.