How does the SBA loans program work?
If you apply for a small business loan at a bank, the bank will check your application and supporting documentation to see if you qualify for a small business loan. If your application contains some items that might not let you qualify for a regular small business loan, the bank can check your application against the guidelines required by the SBA. If your application meets the guidelines set by the SBA, the bank can offer you a loan that is guaranteed by the SBA – a federal government agency. This means that in the event the business owner defaults on the small business loan, the SBA will pay the bank some money to help offset some of the loss it could experience. Do I have to repay an SBA loan? Yes. The SBA loan program was created to allow banks to offer loans to business that might not otherwise qualify for small business loans. The business owner is still expected to pay the loan back to the bank. If you default on an SBA loan, the bank can still pursue normal collections processi
