SBA loan.
In plain English
An SBA loan is a loan made by a regular lender but partly guaranteed by the U.S. Small Business Administration, which reduces the lender's risk and lets small businesses borrow when they might not otherwise qualify. The common programs are the 7(a) loan, a flexible general-purpose loan, and the 504 loan, aimed at real estate and major equipment. SBA loans often carry lower down payments and longer terms than conventional business loans, but they require heavy paperwork, good credit, and usually a personal guarantee, so approval is neither fast nor certain.
01Why it matters
SBA loans can open financing a small business could not get otherwise, but the personal guarantee and paperwork are real, so knowing the tradeoffs helps you judge whether to pursue one.
02The math, step by step
A shop owner takes a 150,000 dollar SBA 7(a) loan at a lower rate and longer term than a conventional loan. The favorable terms come with a personal guarantee, so the owner is on the hook if the business cannot repay.
03What this is NOT
An SBA loan is NOT lent by the government. A bank or lender provides the money; the SBA only guarantees part of it, which is why you still apply and qualify through the lender.
04Receipts
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