An SBA loan is a loan that has been guaranteed (backed) by the U.S. Small Business Administration (SBA). The guarantee assures the lender that it will be repaid a portion of the money it loans even if the borrower fails to repay the loan. As a business owner, you will make a request to a lender (usually your local bank) for funds needed for your business plans. The lender will evaluate your request and decide whether it can make the loan to you on its own. If the lender feels the request has merit but cannot make the loan without additional support, then the lender can request a SBA guarantee. SBA considers issues such as collateral, credit, equity, and loan repayment ability when making a determination on a loan.
SBA does not provide grants to small business. With the exception of disaster loans, the SBA does not provide direct loans to individuals or businesses. More information on SBA loans can be found at www.sba.gov.