The SBA works with lenders to provide loans to small businesses. The agency doesn’t lend money directly to small business owners. Instead, it sets guidelines for loans made by its partnering lenders, community development organizations, and micro-lending institutions. The SBA reduces the risk for lenders and makes it easier for them to access capital. That makes it easier for small businesses to get loans.
SBA guaranteed loans generally have rates and fees that are comparable to non-guaranteed loans.
Lower down payments, flexible overhead requirements, and no collateral needed for some loans.
Loans guaranteed by the SBA range from small to large and can be used for most business purposes, including long-term fixed assets and operating capital.
Lenders and loan programs have unique eligibility requirements. In general, eligibility is based on what a business does to receive its income, the character of its ownership, and where the business operates. Normally, businesses must meet size standards, be able to repay, and have a sound business purpose. Even those with bad credit may qualify for startup funding.