 TITLE: Can You Qualify for a Small Business Loan? CONTENT: ###### Written by: Kristy Welsh\n_Last Updated: October 11, 2017_\nThe U.S. Small Business Administration, SBA, offers varied programs to small business owners. These programs provide financial assistance and help owners obtain the working capital they need to start or expand their business. The SBA does not make direct loans to small businesses, rather, it sets the guidelines for loans, which are then made by its lending partners. The SBA guarantees these loans will be repaid, thus eliminating some of the risk to the lending partners.\nThe following are the guidelines set by the SBA to determine whether your business is considered an eligible small business.\nEligible Businesses\n-------------------\n*   Operate for profit.\n*   Be small, as defined by SBA.\n*   Be engaged in business in the United States or its possessions.\n*   Have reasonable invested equity.\n*   Use alternative financial resources before seeking financial assistance.\n*   Be able to demonstrate a need for the loan proceeds.\n*   Use the funds for a sound business purpose.\n*   Not be delinquent on any existing debt obligations to the U.S. government.\nIneligible Businesses\n---------------------\nThe following list of business types are not eligible for assistance because of the activities they conduct:\n*   Financial businesses primarily engaged in the business of lending, such as banks, finance companies, payday lenders, some leasing companies and factors (pawn shops, although engaged in lending, may qualify in some circumstances).\n*   Businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds (except when the property is leased to the business at zero profit for the property's owners).\n*   Life insurance companies.\n*   Businesses located in a foreign country (businesses in the U.S. owned by aliens may qualify).\n*   Businesses engaged in pyramid sale distribution plans, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants.\n*   Businesses deriving more than one-third of gross annual revenue from legal gambling activities.\n*   Businesses engaged in any illegal activity.\n*   Private clubs and businesses that limit the number of memberships for reasons other than capacity.\n*   Government-owned entities.\n*   Businesses principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs, whether in a religious or secular setting.\n*   Consumer and marketing cooperatives (producer cooperatives are eligible).\n*   Loan packagers earning more than one third of their gross annual revenue from packaging SBA loans.\n*   Businesses in which the lender or CDC, or any of its associates owns an equity interest.\n*   Businesses that present live performances of an indecent sexual nature or derive directly or indirectly more 2.5 percent of gross revenue through the sale of products or services, or the presentation of any depictions or displays, of an indecent sexual nature.\n*   Businesses primarily engaged in political or lobbying activities.\n*   Speculative businesses (such as oil exploration).\nSBA Loan Terms\n--------------\nSBA loan terms are calculated based on your use of proceeds. The following list shows what loan terms are available based on your use of proceeds.\n*   **New building purchase:** 25 years\n*   **Building improvements:** 20 years\n*   **Mortgage refinance:** 20 years\n*   **Machinery and equipment purchase:** 10 years\n*   **Leasehold improvements:** 10 years\n*   **Other debt refinance:** 7years\n*   **Inventory:** 7 years\n*   **Working capital:** 7 years END