Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What financial method does the SBA NOT offer to small business owners?

1. Facilitation of loans with third party lenders

2. Equity financing

3. Direct cash grants

4. Surety bond guarantees

The correct answer is: Direct cash grants

The correct answer is that the SBA does not offer direct cash grants to small business owners. The Small Business Administration's primary focus is on providing financial support that helps businesses access funding through loans, guarantees, and other financial mechanisms. Unlike direct grants, which provide funding that does not need to be repaid, the SBA facilitates loans and loan guarantees, helping small businesses obtain financing through third-party lenders. Equity financing and surety bond guarantees are also part of the SBA's offerings. While equity financing refers to raising funds by selling ownership stakes in the business, surety bond guarantees ensure that businesses can obtain bonds to participate in contracts that might otherwise be difficult to secure. These tools focus on supporting businesses in a way that encourages growth and development rather than providing outright grants that would not require repayment or investment in the business.