Can I borrow money from the SBA?

The SBA offers numerous loan programs to assist small businesses. It is important to note, however, that the SBA is primarily a guarantor of loans made by private and other institutions.

SBA sets the guidelines for the loans while its partners approve the loans to small businesses. SBA backs those loans with a guaranty that will eliminate some of the risk to the lending partners. The Agency's loan guaranty requirements and practices can change, however, as the government alters its fiscal policy and priorities to meet current economic conditions. Therefore, past policy cannot always be relied upon when seeking assistance in today's market.

The loan guaranty, which the SBA provides, transfers the risk of borrower non-payment up to the amount of the guaranty from the lender to the SBA. Therefore, when a business applies for a SBA Loan it is actually applying for a commercial loan, structured according to SBA requirements, which receives an SBA guaranty.  For more on SBA loans, see the section on SBA Loans in our Open Business Library.

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