The United States government provides several resources to small business owners and entrepreneurs designed to increase the likelihood of business success, and the Small Business Administration (SBA) was created for this purpose. One of the biggest types of help offered to new or aspiring business owners is the opportunity to get a small business loan, and the SBA offers a few different kinds.

Figuring out which of the four loans would serve a new company the best offers the best chance for approval and future business success. Types of SBA loans include:

7a Term Loan

This type of loan is the one most commonly offered by the SBA and these loans usually offer an interest rate a small amount above the prime rate. The way in which this loan works is that the SBA will guarantee about 80 percent of the loan amount with a local bank. There are also a few restrictions associated with these types of loans and they can't be used for absolutely everything. Common uses for these loans include working capital and the refinancing of debt.

Certified Development Company Loans

This type of loan is often what a business owner will use to refurbish the company's stores or to make large purchases of necessary equipment upgrades. With such loans, the borrower is required to put down 10 percent of the loan amount as collateral, and the government only guarantees 40 percent of the overall loan amount. There is also a 3 percent fee associated with this loan and interest rates are based upon U.S. Treasury rates.

Microloans

A microloan is often a little more difficult to obtain because it isn't backed by the SBA with the lender. These loans are usually given to non-profit companies or extremely small businesses when the business owner has sufficient credit for the loan. The maximum amount of money loaned for the principal cannot exceed $35,000, and the loan must be paid back within 6 years. In addition, the expected interest rate for this type of loan would be an average of about 10 percent with variances as low as 8 percent or as high as 13 percent.

Alternative Loans

There are a number of specialized loans available as well which are granted on an individual basis and are usually somewhat unique from the other standard loans offered by the SBA. These loans are commonly offered to companies undergoing a certain amount of financial distress as a way to get back on schedule with the budget and profitability.

Seeking help from the Small Business Administration is a smart move for any business seeking financial help to start up, expand, or recover from financial difficulties. It's important to utilize this government resource as it represents savings over dealing solely with banks for funding.