Small Business Loans: Bigger, Better, and More Accessible Than Ever

The rules for getting a Small Business Administration (SBA) loan just got a big shake-up! For decades, entrepreneurs were limited to $5 million in SBA-backed loans. But in May 2023, the SBA revamped this rule. Now, you can borrow up to $5 million per business, as long as each one belongs to a different industry sector. With 96 sectors to choose from, this opens up a lot of possibilities. The SBA's 7(a) loan program has always been popular. It makes loans more available and has flexible collateral requirements. You often don't need to put much money down, and repayment can stretch up to 25 years. This makes it more affordable than standard bank loans. Why the change? The SBA says it's to better reflect the Small Business Act. But some lenders think it's a way to boost funding for successful entrepreneurs without changing the $5 million cap. Whatever the reason, it's a big deal. Lenders are surprised and excited. Some even doubted the change at first. But it's real, and it's happening. For example, one client recently got $7. 2 million in SBA financing for two different businesses. Not everyone thinks it's perfect. Some worry that managing multiple businesses isn't always the best strategy. But many entrepreneurs are happy with the change. It comes at a good time, with lots of businesses up for sale. However, banks won't just hand out big loans to anyone. You'll need excellent credit and a strong track record. So, while this is a big step forward, it's not a free pass for everyone.