To learn more about how to apply for an SBA-guaranteed loan, please visit the SBA website. Upon loan approval, application is made to the SBA for the guarantee. In effect, sharing the potential risk with the lender, which enables more small business borrowers to access capital from traditional lending sources through the SBA Loan Guarantee Program.īecause the SBA doesn’t act as a direct lender, it’s the banks and other participating lenders who decide whether or not to approve a loan application. The guarantee programs adhere to specific lending terms, interest rate caps, and other criteria outlined by the SBA.īecause a small business loan is considered a higher-risk loan, to reduce that risk to the lender, the SBA will frequently guarantee 50% to 85% of an eligible loan (within their 7(a) loan program, for example). The SBA loan guarantee program was created to encourage lenders to work with more small businesses that might otherwise struggle to access capital. SBA loans are offered by participating banks, credit unions, and a few specially-licensed non-bank lenders. Small Business Administration) isn’t a lender, it has guaranteed millions of small business loans since it was established in 1953.
There are also a number of different SBA loan types intended for different business purposes. The guarantee is designed to make it easier for the bank to approve a loan to a borrower whose credit worthiness might fall just below the normal qualifying criteria at the bank. The first thing you need to know is that the SBA isn’t actually a lender-most SBA loans will come from your local bank and are guaranteed by the SBA.
Before you apply, there are a few things you need to know about an SBA loan. Warning: count(): Parameter must be an array or an object that implements Countable in /home/yflye163/public_html/wp-content/plugins/event-tickets/common/src/Tribe/Customizer/Section.Many small business owners think of SBA loans when they contemplate borrowing to fuel growth, expand, or finance some other business initiative. Warning: count(): Parameter must be an array or an object that implements Countable in /home/yflye163/public_html/wp-content/plugins/event-tickets/common/src/Tribe/Customizer/Section.php on line 204
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