What is an SBA Loan?

Young attractive woman working in flower shop, preparing bouquet and smelling white roses

It’s a common misperception that the SBA lends money to small business owners. In fact, SBA loan programs are not loans. Instead, the SBA develops guidelines for loans, which are then made by SBA-approved lenders (like First Bank SBA). The SBA also guarantees that these loans will be repaid, alleviating the risk that a lender might otherwise take. This is good news for business borrowers who’ve struggled to secure a bank loan in the past due to strict criteria and high down payments.

The SBA has developed a range of loan programs that meet key financing needs such as debt refinancing, long- and short-term working capital, real estate financing, and more.

The most popular loan program is the 7(a) loan program. 7(a) loans can be used to start a new business or to acquire, expand, export, and more.