Don’t forget Uncle Sam when you’re shopping for cash. Through the Small Business Administration the government offers a number of loan-guarantee programs geared toward making it easier for companies like yours to borrow money.

These programs work in conjunction with area lenders—in other words, the money typically comes from them, not from the SBA. But because the SBA offers a guarantee of partial repayment in case you default, the risk to lenders is reduced. For that reason, companies that aren’t able to secure loans directly from lenders may qualify through SBA programs.

Here are just a few of the SBA’s more popular programs:

The 7(a) loan guarantee program
This program helps fund businesses that may not have sufficient collateral for a traditional bank loan. Because the SBA is currently operating under a “continuing budget resolution” that limits its budget, the maximum 7(a) loan is $500,000. That will likely change when the agency’s fiscal year 2003 appropriation is passed. Loans of less than $150,000 receive an 85 percent guarantee. The maximum guarantee for larger loans is 75 percent. Loans for working capital generally can’t exceed a term of seven years. Loans used to acquire land or buildings have a maximum term of 25 years. Interest rates depend on the size of the loan and may be fixed or variable, but they can’t exceed the prime rate plus 4.75 percent.

The SBA LowDoc loan program
These loans’ selling points are reduced paperwork (a one-page application for you and the same for the lender) and quick turnaround time on approval: 36 hours from the time the SBA receives your completed application. The guarantee percentages and interest rates are the same as for the 7(a) program, but the maximum you can borrow is $150,000. Maturity is usually five to 10 years but in the case of fixed assets can be up to 25 years. Note that a LowDoc loan can be used to start a business.

The SBAExpress loan program
Featuring a streamlined loan-review process, this program guarantees loans of up to $250,000 for a maximum term of seven years. It also enables lenders to offer very small loans and revolving lines of credit, and it’s available to startup companies. The SBA will guarantee only 50 percent of these loans, but no collateral is needed on loans up to $25,000. Interest rates are negotiable and may be higher than with other SBA programs.

Microloans
These are the smallest SBA loans, geared especially to startup and growing businesses. Don’t ask your banker about them: loans of up to $35,000 are made by nonprofit community-based lenders. The maximum term is six years, and interest rates vary.

Other programs exist to help women and minorities, to stimulate business development in “enterprise zones,” to fund exporters, to provide short-term capital needs, and more. For complete details—including information on the SBA’s Certified Lenders and Preferred Lenders—visit the SBA website, www.sba.gov, or contact your local SBA office.