SBA loans work by lowering the risks lenders face when working with small business owners. SBA loans are partially guaranteed by the Small Business Administration and issued exclusively to small business owners by participating lenders according to SBA-defined guidelines.

Should a borrower default on their loan, the SBA reimburses the lender up to 85% of the loan amount.

As a result, participating creditors consider a larger pool of applicants and offer competitive terms. All this translates into greater access to long-term financing, lower interest rates, longer repayment periods and affordable monthly payments.