Did you know that when you get an SBA business loan that SBA is not the lender of your loan? SBA does not provide loans but actually only guarantees a portion of your loan. SBA shares the risk with the commercial lender when you are not able to repay the loan in full. The commercial lender agrees to structure your loan according to SBA’s requirements. The commercial lender receives a guaranty from SBA on a portion of your loan. Currently the guaranty is 90% until the end of 2010 or until the funds run out (which ever comes first). In 2011 the guaranty will go back to 75%.
Wishing You the Best,