9. How do I obtain a grant or funding for a loan through the U.S. Small Business Administration?
The Federal Government Small Business Administration (SBA) does not provide funding for direct loans nor does it provide grants or low interest rate loans for business start-up or expansion. The SBA does, however, enable its lending partners to provide financing to small businesses (when funding is otherwise unavailable on reasonable terms) by guaranteeing major portions of loans made to small businesses.
The eligibility requirements and credit criteria of the program are very broad in order to accommodate a wide range of financing needs. When a small business applies to a lending partner for a loan, the lender reviews the application and decides if it merits a loan on its own or if it requires the additional support of an SBA guaranty. SBA backing on the loan is then requested by the lender.
In guaranteeing a loan, the SBA assures the lender that, in the event the borrower does not repay the loan, the government will reimburse the lending partner for a portion of its loss. By providing this guaranty, the SBA is able to help tens of thousands of small businesses every year to get financing they would not otherwise obtain.
To qualify for an SBA guaranty, a small business must meet the SBA’s criteria. For additional information, visit the SBA’s website financial section.