WHAT IS AN SBA LOAN?

SBA stands for “Small Business Administration.” The Small Business Administration is a government agency, not a business lender. Applications for SBA Loans are not sent directly to the SBA. Instead, you must apply through one of three types of financial institutions: commercial banks, credit unions, or alternative business financing facilitators like Luminary Financial. These loans help small business owners just like you start or grow businesses.

What makes an SBA Loan different than all other business loans is that the SBA guarantees up to 85% of loans up to $150,000 and up to 75% of loans over that amount and up to $500,000. This means that even if the borrower defaults on the loan, the financial institution would still get back 85% or 75% of the borrowed funds. The SBA also sets limits on the interest rates and fees lenders can charge.