Small Business Administration

SBA Loans

SBA Guidelines

Business Eligibility

VA Loans

FHA Loans

Applying for an FHA Loan

HUD Homes

Stafford Loans

Perkins Loans

Deferring Student Loan Payments

Business Eligibility

The SBA will not provide loans to small businesses if the loan would be used to pay off creditors, or if it would be used to make payments to the business owner or the partners in the business (or to replenish funds that were formerly used to pay the owner or partners). The agency also will refuse a loan if it would be used for speculative purposes.

Some Businesses Are Ineligible

There are certain kinds of businesses that may not receive SBA loans. They include:

Real estate investment companies. These are organizations that buy real property as an investment only.

Firms that are speculative in nature. These are companies that make their money by fluctuations in prices, including commodities futures dealers, and those who buy and sell rare stamps and coins.

Companies whose stock-in-trade is money. This means banks, insurance companies, and finance companies.

Academic schools. While schools that teach only academic subjects are ineligible, business schools, trade schools, nursery schools and preschools all may receive SBA loans.

Gambling activities. Loans are not given to casinos and racetracks. However, stores and other establishments that get less than a third of their income from the sale of lottery tickets and other legally-authorized gambling activities may receive an SBA loan.

Pyramid sales. These are companies where the profits come from the work of an ever-expanding number of subdistributors.

Illegal activities. The government does not want to subsidize illegal activities, and will also refuse loans for businesses who deal in otherwise legal products used for illegal purposes.

Some Are Eligible Under Certain Circumstances

Additionally, some businesses may not be eligible for SBA loans under certain circumstances. For examples, a franchise in which the franchisor has too much control over the franchisee may not be eligible. A recreational facility may not get an SBA loan if it is not open to the general public and if it discriminates against members of particular groups. And while farms and fishing vessels are eligible for SBA loans, they must first endeavor to get loans from other government agencies. Farmers should first apply to the Consolidated Farm Service Agency; owners of certain kinds of boats should apply to the National Marine Fisheries Service.