Small Biz State Loan Guaranty Programs – A Niche Lending Opportunity for Banks and Credit Unions

August 25, 2025

Bob Coleman
Founder & Publisher

Main Street Monday: Small Biz State Loan Guaranty Programs – A Niche Lending Opportunity for Banks and Credit Unions

Check out this list on ways to expand your small business portfolios while carefully managing risk. One often overlooked tool is the state and local loan guaranty program.

Download PDF of the table here.

A Snapshot of Programs Nationwide

The table below summarizes a range of active guaranty programs at the state, city, and county levels. It shows the maximum loan amounts, guarantee percentages, and what each program means for borrowers — and by extension, for lenders considering participation.

The Market Potential

Individually, these programs may look niche. Collectively, they represent billions of dollars in potential small business credit support nationwide.

• California alone has guaranteed over $2.5 billion since 2013.
  
• Missouri’s Linked Deposit program has deployed more than $4.5 billion.
  
• Dozens of smaller programs target specific borrower groups such as startups, minority-owned firms, and microenterprises.
  

For lenders, these programs create new product niches:

• “Guaranty-backed working capital loans”
  
• “Micro-guaranteed startup credit lines”
  
• “Veteran loan products with 100% coverage”