|
Q.What is an SBA Loan?
A.The SBA loan guarantee program provides limited guaranteed loans to small businesses that qualify. In general, the maximum amount guaranteed by the SBA is $2 million. Small loans, defined as those under $150,000, are guaranteed only up to 85%. Loans for more than $150,000 are generally guaranteed at 75%. The typical business that will seek an SBA guaranteed loan when conventional lenders deny a loan because the prospective borrower has insufficient collateral to support the small business loan request. The SBA loan guarantee acts as a substitute for the needed collateral thus providing the lender with satisfactory security (collateral) to support the loan. If the borrower fails to repay the loan, the lender can recoup the guaranteed portion of the loan from the SBA.
To be eligible for the SBA loan guarantee program, a business must: (1) be a small business that is independently owned and operated and not dominant in its industry; (2) be a for-profit company; (3) be a type of business acceptable to the SBA; and (4) have applied for and been denied a conventional loan.
small business loans, raise money to start a business, financing a new business, capital, money, startup, start-up, starting a business, personal loans, personal loan, small business loans.
|
|
