SBA’s Business Loan Programs
The SBA administers three separate but equally important loan programs. SBA sets the guidelines for the loans while SBA’s partners (lenders, Community Development Organizations, and Microlending Institutions) make the loans.  The SBA backs those loans with a guarantee that will eliminate some of the risk to the lending partners.  The agency's loan guarantee requirements and practices can change, however, as the government alters its fiscal policy and priorities to meet current economic conditions. Therefore, past policy cannot always be relied upon when seeking assistance in today's market.

Federal appropriations are available to the SBA to provide guarantees on loans structured under the agency's requirements. With a loan guarantee, the actual funds are provided by independent lenders who receive the full faith and credit backing of the federal government on a portion of the loan.

The loan guarantee which the SBA provides transfers the risk of borrower non-payment up to the amount of the guarantee from the lender to the SBA. Therefore, when a business applies for an SBA loan, they are actually applying for a commercial loan, structured according to SBA requirements, and receive an SBA guarantee.

In a variation of this concept, community development organizations can get the government's full backing on their loan to finance a portion of the overall financing needs of an applicant small business.

SBA’s Investment Programs
In 1958 Congress created The Small Business Investment Company (SBIC) program. SBICs, licensed by the Small Business Administration, are privately owned and managed investment firms. They are vital participants in a partnership between the government and the private sector economy. With their own capital and funds borrowed at favorable rates through the federal government, SBICs provide venture capital to both new and established small independent businesses. 

All SBICs are profit-motivated businesses. A major incentive for SBICs to invest in small businesses is the chance to share in the success of the small business if it grows and prospers.

SBA’s Bonding Programs
The Surety Bond Guarantee (SBG) Program was developed to provide small and minority contractors with contracting opportunities they would not normally have.  The U.S. Small Business Administration can guarantee bonds for contracts up to $2 million, covering bid, performance, and payment bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels.

SBA's guarantee gives sureties an incentive to provide bonding for eligible contractors and thereby strengthens a contractor's ability to obtain bonding and greater access to contracting opportunities. A surety guarantee and an agreement between a surety and the SBA provides that the SBA will assume a predetermined percentage of loss in the event the contractor should breach the terms of the contract.