By Ami Kassar The U.S. Small Business Administration has a marketing challenge: Many entrepreneurs don't understand its lending program. A lot of the confusion arises when an entrepreneur speaks with a lender about the opportunity to get an SBA-backed loan. If the lender rejects the application and doesn't provide financing, the borrower often assumes that he or she has been automatically disqualified from the program. This is because the borrower thinks that the SBA is the lender, when in fact it isn't. Instead, the SBA is a guarantor of small-business loans. Its program is designed to encourage lenders to take on riskier loans than they might otherwise. While there is a book full of rules and regulations that lenders have to comply with, there is a lot of latitude in their decision making. In fact, I recently wrote about this topic, describing how the SBA's standard operating procedure can be open for interpretation.One area where lenders differ is in how they assess the collateral that a borrower brings to the table. It's a well-known principle of lending that a lender will want to collateralize a business loan with an entrepreneur's company or personal assets to cover its losses in case the loan goes bad. The collateral could come in the form of real estate, equipment, stock accounts, accounts receivable and/or inventory.That being said, there are plenty of borrowers who don't have enough collateral to cover the loan they want on a dollar-to-dollar basis, which is a typical requirement. Such entrepreneurs should be good candidates for loans backed by the SBA.A main goal of the SBA is to help small businesses receive affordable financing by offering loan guarantees to lenders, who in turn make the loans. Such guarantees enable lenders to take on greater risk with businesses that may not be financially strong enough to qualify for a conventional bank loan, usually because the owners lack good credit, steady cash flow or enough collateral. In other words, the SBA acts as a buffer between the lender and the borrower, mitigating the lender's risk and aiding the small-business owner. Many small-business owners searching for financing tend to forget that the SBA is not the actual lender. Each SBA lender is its own entity, and lends differently depending on its own appetite for risk, experience and timing. Some lenders will require dollar-for-dollar collateral, while others are more flexible. Borrowers should always talk to a couple of different lenders when searching for financing, especially when they can't offer 100% collateral for a loan. After all, a rejection from one SBA lender doesn't necessarily mean a rejection from all SBA lenders.Perhaps the SBA should make it a requirement that when one lender turns down a loan, the lender must educate the borrower about what the agency does and advises him or her to keep looking. Too often, borrowers takes the first rejection as an absolutely no, which can lead them down the path to high-priced alternative lenders. Write to WSJsmallbusiness@wsj.com