Supply: Vast. The SBA guarantees some $12 billion per year in loans.

Best Use: Purchasing equipment, financing the purchase of a business and in certain instances, working capital. The SBA guarantee can help borrowers overcome the problems of a weak loan application associated with inadequate collateral or limited operating history.

Cost: Comparatively inexpensive. Maximum allowed interest rates range from highs of prime plus 6.5 percentage points to prime plus 2.75 percentage points, though lenders can and often do charge less. These rates may be higher or lower than rates on nonguaranteed loans. What's more, banks making SBA loans cannot charge "commitment fees" for agreeing to make a loan, or prepayment fees on loans under 15 year (a prepayment penalty kicks in for longer loans), which means the effective rates for SBA loans may be, in some instances, superior to those for conventional loans.

Ease of Acquisition: Challenging. Although the SBA has created streamlined approaches to loan applications, conventional SBA guarantee procedures and protocols pose a significant documentation and administrative challenge for most borrowers.

Range of Funds Typically Available: The SBA guarantees up to $1 million of loan principal.