Get Out Your Checkbook

The customer requirement for securing an SBA loan is for 10 percent in equity in the transaction. "That's not necessarily 10 percent down on a piece of a equipment," states Dugan. "That's 10 percent of the project cost." Then, the SBA essentially guarantees and provides moneys to the lender in the transaction. The lender only puts in 50 percent of the money, and the SBA puts up 40 percent. "What's appealing," adds Dugan," is that the lender, who only puts up 50 percent of the money, gets a lien on 100 percent of the asset." So, according to Dugan, from a collateral perspective, it's extremely safe for a lender to do.