A small business loan is funded entirely by the lender. Most types of business loans are conventional loans. These loans are not government-guaranteed, and the terms and conditions are typically set by the lender.

SBA loans are partially guaranteed by the U.S. Small Business Administration, a government agency. The SBA does not directly lend money but partners with approved lenders, such as banks and credit unions, to provide loans to small businesses.

The main difference between an SBA loan and a small business loan is the government guarantee provided by the SBA, which reduces the risk for lenders and often results in more favorable terms for borrowers. However, SBA loans have stricter eligibility requirements and a more involved application process.

Small business loans come from various sources and may offer more flexibility but often come with different terms and interest rates, depending on the lender. Small business owners should carefully consider their financial needs and creditworthiness when choosing between these financing options.