what is a sba loan

An SBA loan is a loan that is guaranteed by the U.S. Small Business Administration (SBA) and issued by participating lenders, usually banks. The SBA's 7(a) loan program is its primary program for providing financial assistance to small businesses. These loans can be used for various purposes, such as acquiring, refinancing, or improving real estate and buildings, short- and long-term working capital, refinancing current business debt, purchasing machinery and equipment, and changes of ownership. The SBA guarantees a portion of the loan, which reduces the risk for the lender, making it easier for small businesses to get loans. The maximum loan amount and terms vary depending on the specific 7(a) loan program. SBA loans generally have competitive terms, counseling and education benefits, and unique benefits such as lower down payments and flexible overhead requirements. The application process for an SBA loan involves choosing a lender, gathering necessary documents, and submitting the application