Business owners and entrepreneurs often think that the SBA is a lender. If they walk into their local bank and are told they are not eligible for an SBA loan, they assume that the program will not work for them.

This is the furthest thing from the truth.

The SBA is not a lender. It is a government guarantee program that encourages banks (and a handful of non-bank lenders) to take on riskier loans then they otherwise would. There are over 2,200 lenders in the country that utilize the program.

While every lender follows the same SBA rules, there are vast differences between lenders to be considered.

Every lender has their own credit policy and criteria. A loan that is not interesting to one lender, could be a home run for another one.

Furthermore, there are many different loan programs within the SBA. The lender whose branch you walk into might not utilize the loan program that is perfect for your business.

And finally, the person you are talking to at your bank (particularly if it's a bigger bank) might not know anything about SBA loans, even if the same bank has a department three floors up that specializes in them.

SBA loans can be an incredible tool to help you grow and expand your business at reasonable rates with a long amortization. Be sure you speak to an expert who understand them, before ruling them out.

As a side note, this week is Small Business Week and in honor of it we published a detailed research piece called "Demystifying the Small Business Administration" with our partners at Vistage. If you're interested, you can download it here.