I recently went through the process of obtaining an SBA (Small Business Administration) loan. These are loans that are what I call “cash flow” loans, secured more by the companies earnings rather than collateral (though collateral may be required, see below). SBA loans are written by private banks to standards set by the government. If these standards are met, then bank loans under this program get a partial guarantee from the US government.
Before I go on to describe the process, I feel compelled to note that as a libertarian who does not believe the SBA should even exist and who believes that such loan guarantees are a subsidy program that should be eliminated, I was obviously conflicted by whether to seek out such a loan.