What is an SBA Backed Business Line of Credit?
	There is a very big misconception about the purpose of the SBA (Small Business Administration). Many new entrepreneurs think that the SBA acts as an arm of the government to provide loans for startup and small businesses. This is not true. The SBA acts as a guarantor of business LOC and loans provided by banks enrolled in the SBA program. In the event that you default on a credit facility, the US Federal Government will reimburse an enrolled bank or financial institution. Essentially, Uncle Sam acts as your cosigner on a business line of credit or business loan. As of 2010, in the event of default, the Federal Government will provide a bank with a reimbursement of up to 85% of the loaned amount depending on the SBA program that you enrolled in when you applied for a credit facility. The requirements for applying for an SBA Business LOC are pretty straightforward. Foremost, you must be a US citizen of good moral character (you cannot be a convicted felon and apply for a SBA program). The second important characteristic of an SBA backed business line of credit or business loan is that you must have the appropriate collateral and credit to support the debt obligation that you are undertaking. If you do not possess these requirements then you may want to seek alternative methods of financing discussed in our previous business articles. Once you have been accepted into your specified SBA program, you can go to a number of banks to determine which financial institution will give you the best terms for a business LOC. When evaluating proposals from a bank or finance company, you should look at the interest rates, loan covenants, and repayment that is required of the specific company offering you the loan. Try to determine which line of credit is most appropriate for you while you participate in the negotiation process.
	Below are a number of articles that you can read that will assist you in obtaining a business LOC:
	Business LOC vs. Business Loan Securing a Business LOC Do You Need a Business Plan to get a Credit Line? How has the Economy Affected People's Ability to get Credit? Unique Business LOC Types Property Rehab Loans and Lines of Credit What is a Warehouse Line of Credit? Businesses Best Suited for a Business LOC Alternatives to Business Credit Facilites Using Personal Credit Cards Instead of Business LOC The Mechanics of a Business Loan The Mechanics of a Business Line of Credit Importance of Establishing a Business Line of Credit Using a Business LOC for Startup Capital Questions That Will Be Asked By Your Banker The Importance of Personal Credit When Obtaining a Business LOC What is an SBA Backed Business Line of Credit? Determining How Much You Can Borrow Through A Business LOC How a Business Line of Credit Should Be Used Comparing Offers from Banks for Business Lines of Credit Business LOC and the Concept of Leverage Secured Vs. Unsecured Business Line of Credit Using a Business Loan/Credit Line Brokerage Repayment of a Business LOC Commonly Used Terms in Lending Using a Small Bank to Obtain a Business Line of Credit New Business Line of Credit Business Revolving Line of Credit Overdraft Line of Credit Small Business Lines of Credit Accounts Receivable Backed Lines of Credit