I'm purchasing a business right now. If not for the SBA guaranteed loan program I would not be able to qualify. The SBA is guaranteeing 75% of the loan amount to the bank issuing my loan, in case I default. This allows the bank to loosen the guidelines they would normally impose, and makes it possible for me to actually qualify. Without the SBA guarantee to the bank, I wouldn't be able to do this.
It's a similar situation with housing. If FHA didn't offer mortgage insurance and there weren't private mortgage insurers for conventional home loans, very few people would ever have the 20% downpayment they would need to otherwise qualify for the house.
In my case, I'm able to buy this business with 2.5% of the total loan amount out of my pocket... which is amazing.
Why do we need SBA at all? It ain't in the Constitution. And most small businesses do fine without it. Many probably don't know it exists.
I'm purchasing a business right now. If not for the SBA guaranteed loan program I would not be able to qualify. The SBA is guaranteeing 75% of the loan amount to the bank issuing my loan, in case I default. This allows the bank to loosen the guidelines they would normally impose, and makes it possible for me to actually qualify. Without the SBA guarantee to the bank, I wouldn't be able to do this.
It's a similar situation with housing. If FHA didn't offer mortgage insurance and there weren't private mortgage insurers for conventional home loans, very few people would ever have the 20% downpayment they would need to otherwise qualify for the house.
In my case, I'm able to buy this business with 2.5% of the total loan amount out of my pocket... which is amazing.
I did and didn't need them.