Hi PC Phixer,
Unfortunately you're not "protected". If you sign up for a business loan, you're personally responsbile for paying it back. If you can't pay it back then your assets and credit are on the line.
Generally, in both of the case of a bank business loan and an SBA loan, you’re going to need to personally guarantee the loan. With an SBA backed loan, however, the government guarantees 90% of the loan amount. This is why banks are more likely to lend to small businesses with an SBA backing. SBA loans have their own set of rules & requirements and may be better as well for the borrower. Right now the interest rate on an SBA backed loan is 6%. General business loans may have a different interest rate.
I suggest that you're looking to get a loan, you first make sure that you're in a good financial state (the bank probably will not loan to you otherwise, anyways). Also, make a plan B for when your business "tanks" and you'll need to pay back the loan in full. Think about what you can sacrifice if you don't have enough return to pay back the loan out of the profit of your business.
I hope this helps..
Bryan Janeczko, Founder of Wicked Start