517-265-5141

5285 W. US 223, Adrian, MI 49221

 
 

Business in Lenawee County, Michigan

Small Business Administration Programs

Guaranteed Loan Programs (Debt Financing)

Small Business Administration (SBA) does not make direct loans to small businesses. Rather, SBA sets the guidelines for loans, which are then made by its partners (lenders, community development organizations, and microlending institutions). The SBA guarantees that these loans will be repaid, thus eliminating some of the risk to the lending partners. So when a business applies for an SBA loan, it is actually applying for a commercial loan, structured according to SBA requirements with an SBA guaranty. SBA-guaranteed loans may not be made to a small business if the borrower has access to other financing on reasonable terms.
Basic 7(a) Loan Program.

7(a) loans are for eligible borrowers for starting, acquiring and expanding a small business. This type of loan is the most basic and the most used within SBA's business loan programs. Borrowers must apply through a participating lender institution.  7(a) Loans are typically structured with the SBA providing up to a 90% guarantee and the borrower providing between 10% - 30% equity depending on the project.  Loan proceeds can be used for real & personal property as well as inventory, working capital and accounts payable.

Certified Development Company (CDC) 504 Loan Program

"The 504 Loan Program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization.  504 loans are made available through Certified Development Companies (CDCs), SBA's community based partners for providing 504 Loans.  504 Loans are typically structured with SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing10% of the project costs. Under certain circumstances, a borrower may be required to contribute up to 20% of the total project costs.

Loan proceeds can be used for real & personal property and the refinancing of debt in connection with an expansion of the business through new or renovated facilities or equipment.   HOWEVER, The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing (except for projects with an expansion component or that meet the temporary refinancing provisions of the Small Business Jobs Act of 2010).

Contact Tim Robinson at 517-265-5141 or tim@lenaweenow.org for more information about the 504 Loan Program.