By Jenna Lee, Gusto business finance writer
The U.S. Small Business Administration (SBA) is a government organization dedicated to helping small business owners launch and grow their businesses. One of the main ways they do this is through their loan programs. With SBA loans, business owners don’t usually borrow from the SBA directly. Instead, the SBA typically guarantees part of the loan. In other words, they promise to pay the lender a portion (usually 50 percent to 85 percent) of the loan if the borrower ends up defaulting. This helps reduce risk and encourages these third-party lenders—usually banks and credit unions—to lend, making it easier for entrepreneurs to get the money they need to start and/or maintain their business.
In this recent blog, Gusto discusses SBA loan financial incentives and COVID-19 relief (PPP principal and interest payment are covered by the SBA for all loans approved before the end of September). Read more here!
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