Ten Myths and Facts About SBA

Myth:
It takes four to six months to get a SBA Loan processed.
Fact:
Completed loan applications from banks average 10 working days.

Myth:
SBA only provides free business counseling to business people with SBA loans.
Fact:
SBA provides free business counseling to all business people.

Myth:
SBA provides no assistance in helping a business get federal contracts from the government.
Fact:
SBA has procurement assistance at Small Business Development Centers across the country.

Myth:
A business person can get cheaper interest rates for business loans from SBA.
Fact:
SBA does not provide lower interest rates for small business people Interest rates are negotiable with the bank, but are limited to 2.25% above the prime rate in the Wall Street Journal for loans with maturities of less than 7 years, and limited 2.75% with maturities of 7 years or more.

Myth:
Small loans are not available through SBA.
Fact:
SBA provides an incentive to banks to make loans under $50,000 by reducing their guarantee fee by half.

Myth:
SBA has no specialized programs to asisst minority business persons.
Fact:
SBA's 8(a) and 7(j) programs provide specialized management and technical assistance to minorities.

Myth:
There are few SBA loan programs.
Fact:
SBA finance programs provide a wide spectrum of opportunities including Guaranteed Loan, Handicapped Assistance, Contract Loan, Veterans Loan, Exported Revolving LOC, and Small Business ($50,000 and less).

Myth:
SBA has no programs to assist veterans.
Fact:
SBA gives veterans priority when their loan application arrives in the office or when they need business counseling to start a small business.

Myth:
SBA has grants to start or expand a small business.
Fact:
SBA has NO grant program to start or expand a small business.

Myth:
Contractors receive no assistance from SBA.
Fact:
SBA's Surety Bond Guarantee Program asists contractors with their Bid Bond, Performance Bond, and Payment Bond.

Mary Ann Standal * (800) 388-2881 Ext: 214
                            (619) 563-1000 Ext: 214