finance
All about guaranteed business loans
Anyone who starts a small business needs financial support. In the initial phase, businesses often need loans for all their expenses. Here is where a guaranteed business loan would be extremely helpful. Let us learn more about these guaranteed business loans: To begin with, let us understand the definition of a guaranteed business loan. A guaranteed business loan is a type of funding provided against some collateral. This means that if the borrower fails to make a payment, the lender does not lose out on the money. This is also where many business owners misunderstand the term of these loans and assume that their loan applications will not get rejected. However, this is a misunderstanding, as it is the other way round. Types of guaranteed business loans There are two broad categories of guaranteed business loans. The first one includes loans that are backed by the Small Business Administration (SBA), and the second ones are those backed by a personal guarantee. The SBA helps to reduce the risk for loan providers. In most cases, the SBA can secure close to 85% of the loan. The SBA 7(a) loans are extremely popular and can provide as much as USD 5 million.