Differences between SBA-Guaranteed and USDA-Guaranteed Loans
Another similarity is that both guarantee up to a portion of the respective loans, meaning if you default on the loan, the USDA or SBA will pay back your lender up to the percentage of the loan it promises to repay.
However, there are more differences than there are similarities between these two kinds of loans, including the following ones.
- You can qualify for a USDA business loan only if you are in a community with at most 50,000 people. If yours or your business place’s population exceeds 50,000, then you will not be eligible for the business loan.
- A rural-based business of any size can qualify for a USDA loan. However, to qualify for SBA Loan Program 7(a), your small business must meet size standards set forth by the agency. In other words, it has to be small enough so as to meet the SBA’s criteria.
- To qualify for a USDA loan, your business can also be a nonprofit. However, to be eligible for an SBA loan, it has to be a for-profit business