| What is the
Small Business Administration?
"The U.S. Small Business
Administration (SBA) was created in 1953 as an
 independent
agency of the federal government to aid, counsel, assist and
protect the interests of small business concerns, to
preserve free competitive enterprise and to maintain and
strengthen the overall economy of our nation. We recognize
that small business is critical to our economic recovery and
strength, to building America's future, and to helping the
United States compete in today's global marketplace.
Although SBA has grown and evolved in the years since it was
established in 1953, the bottom line mission remains the
same. The SBA helps Americans start, build and grow
businesses." source:
www.sba.gov
An SBA Loan is a loan granted by
financial institutions and "guaranteed" by the backing of
the United States Government. It is not the aim of the
SBA Loan program to guaranty loans to businesses which might
be identified as high risk, un-bankable, or without a
reasonable assurance of repayment ability.
Basically, an SBA Loan
Guaranty does not make a bad loan good. Rather the SBA's purpose is to
provide guarantee to the Lender to entice them to grant a
loan they might not otherwise have made.
Why An
SBA LOAN?
The reasons why a
business owner would turn to the SBA for a guaranteed loan
are.
- A lender is more likely to lend
to a business with an SBA Loan Guarantee
- SBA Loans typically offer a
longer repayment period
- SBA Loans offer a lower down
payment
- SBA Loans offer no balloon
payments
- SBA Loans offer multiple
interest rate options (floating, adjustable, or fixed
terms)
- SBA Loans offer fast credit
approvals.
- SBA Loans offer no prepayment
penalties
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