The SBA does not lend money. Instead, they work with lenders. An SBA loan is when the SBA guarantees/secures the loan for up to 80% of the total value. This can be the deciding factor for a lender as the SBA is taking on the responsibility for the loan should you default.
While this can make it easier to get the loan, it can take much longer for approval, and an SBA loan is federal debt. Any default will prevent you from obtaining other loans, such as a mortgage or student loans, and can keep you from co-signing on those loans for others, including your children. A regular lender can affect your credit score. A federal loan can affect your salary, your home, and more.
You will be required to complete forms asking about past history, with questions like “have you ever been arrested?” answer honestly, even if the event is sealed. If they find conflicting information, it can look like you were dishonest. That can prevent you from getting the current loan and make you ineligible for any future SBA or federal loans.
While this can make it easier to get the loan, it can take much longer for approval, and an SBA loan is federal debt. Any default will prevent you from obtaining other loans, such as a mortgage or student loans, and can keep you from co-signing on those loans for others, including your children. A regular lender can affect your credit score. A federal loan can affect your salary, your home, and more.
You will be required to complete forms asking about past history, with questions like “have you ever been arrested?” answer honestly, even if the event is sealed. If they find conflicting information, it can look like you were dishonest. That can prevent you from getting the current loan and make you ineligible for any future SBA or federal loans.
TIP: Always be open and honest with a lender. Tell them what they will find in your credit report or background check. If they know, they can advise and help you. Sometimes, it’s just a matter of waiting for some time to pass. However, suppose they find something they should have heard from you. In that case, they may question your character, decide you are not trustworthy and deny the loan that might have been approved otherwise.
