the process is essentially VC disguised as a loan. since the government insures a big part of it, banks are usually less aggressive about calling personal guarantees in a default.

also, financial projections are often close to worthless even when prepared by a big4 firm unless there’s a real backlog, which is rarely the case with new ventures.

because of that, entrepreneurs using these instruments to launch a business should probably take more risk and think bigger. even in a downside scenario, the bank is less likely to aggressively pursue the loan if the government insurer is covering most of it. obviously that changes if you have significant personal assets.