SBA Loans

SBA loans are partially guaranteed by the government and can provide your business up to $5 million in funding.

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Editorial note: LendingTree’s partners do not offer SBA loans. They offer alternatives to SBA loans with different eligibility requirements and funding timelines.

What is an SBA loan?

The U.S. Small Business Administration (SBA) partners with banks, credit unions and online lenders to provide low-cost funding to businesses who struggle to qualify for traditional financing.

SBA loans are generally more affordable than other types of small business financing since the SBA guarantees up to 75% to 90% of the loan, helping reduce lender risk. The SBA also caps interest rates to keep your loan repayments from getting out of control.

You can use an SBA loan to cover various business expenses — from general operating costs to fixed assets like commercial real estate and equipment.

Types of SBA loans

The SBA program that’s right for your company will depend on the amount you’re seeking as well as the purpose of the loan.

SBA loan programLoan sizeTermMax. interest ratesIdeal for…
SBA 7(a) loansUp to $5,000,000Up to 300 monthsVariable: Prime + 6.50%

Fixed: Prime + 8%
General business financing
SBA CDC/504 loansUp to $5,500,000Up to 300 monthsApproximately 3.00%Financing major fixed assets
SBA Express loansUp to $500,000Line of credit: Up to 120 months

Real estate: Up to 300 months
Prime + 6.50%Fast approvals (36 hours)
SBA Export Express loansUp to $500,000Up to 84 months if used as line of creditPrime + 6.50%Export companies requiring fast turnaround
SBA Export Working CapitalUp to $5,000,000Up to 36 months if used as line of creditInterest rate set by the lender — No SBA maximumExport companies in need of working capital
SBA microloansUp to $50,000Up to 72 monthsGenerally between 8.00% and 13.00%Women, low-income, veteran and minority entrepreneurs requiring smaller loan amounts
SBA disaster loansUp to $2,000,000Up to 360 months
  • Up to 4.00% for applicants ineligible for other financing
  • Up to 8.00% for applicants eligible for other financing
Small businesses affected by declared disasters
SBA CAPLinesUp to $5,000,000Up to 120 monthsPrime + 6.50%Lines of credit for short-term or seasonal financing
SBA International Trade loansUp to $5,000,000Up to 120 monthsPrime + 6.50%Companies wanting long-term funding to keep up with foreign competitors
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SBA 7(a) loans

  Ideal for general business financing

The SBA 7(a) loan is typically the most popular option in the U.S. Small Business Administration (SBA) loan program. This working capital loan can provide up to $5,000,000 to use toward general business expenses like working capital, inventory, equipment and real estate. The SBA can guarantee up to 85% of loans up to $150,000 and up to 75% of loans greater than $150,000.

Repayment terms depend on the use of funds:

  • 25 years for commercial real estate
  • 10 years for equipment
  • 10 years for working capital or inventory

Collateral may be required for loans exceeding $50,000. Interest rates may either be fixed or variable and are based on the federal prime rate.

SBA 7(a) variable loan interest rates

Loan amountRate standardVariable maximum allowable (with current 8.50% prime rate)
$0 to $50,000Base* + 6.5%15%
$50,001 to $250,000Base* + 6%14.5%
$250,001 to $350,000Base* + 4.5%13%
$350,000 or aboveBase* + 3%11.5%

*Variable interest rate 7(a) loans are pegged to the prime rate (currently at 8.5%), the LIBOR rate or the SBA optional peg rate.

According to the SBA, fixed interest rate 7(a) loans are based on the prime rate in effect on the first business day of the month of your loan.

SBA 7(a) fixed loan interest rates

Loan amountFixed maximum allowable (with current 8.50% prime rate)
$0 to $25,00016.50%
$25,000 to $50,00015.50%
$50,000 to $250,00014.50%
Over $250,00013.50%

Rates accurate as of April 2024.

Borrowers must also pay a guaranty fee, which would be a percentage of the loan amount. Fees range from 0% for veteran-owned businesses and loans under $1 million, and up to 3.75% for other borrowers.

SBA CDC/504 loans

  Ideal for financing major fixed assets

The SBA 504 loan program combines funds from the SBA and Certified Development Companies (CDCs). These loans can be used to purchase fixed assets such as commercial land, buildings and fixed assets like machinery, and to finance construction projects related to commercial property.

Typically, the bank or financial institution provides 50% of the loan amount and the CDC (backed by the SBA) provides 40%, leaving you to contribute the final 10%. In some situations, you may have to contribute 20%.

The maximum 504 loan size is $5 million, though certain energy-related projects may qualify for $5,500,000. Repayment terms are 10, 20 or 25 years. Interest rates for 504/CDC loans are approximately 3.00% of the total loan amount.

If deciding between the SBA 7(a) versus 504 loan, note that the 504 option allows you to finance fixed assets at a lower fixed interest rate — typically 3.00% versus the 7(a)’s lowest fixed rate of 13.5%. However, the 504 loan program has a job creation and retention requirement, which means you need to create or retain at least one job opportunity per every $90,000 guaranteed by the SBA.

SBA Express loans

  Ideal for fast approvals

The SBA Express loan can be a good option for companies needing fast funds to cover urgent expenses. Borrowers typically receive a lending decision within 36 hours, compared to five to 10 days for SBA 7(a) loans.

However, the name “express” can be misleading — although these loans have quick turnaround times, it can take between 25 to 60 days for funds to be deposited into your bank account.

Loan amounts go up to $500,000, with maximum terms of 120 months for lines of credit and 25 years for real estate. You can use the funds the same as the 7(a) loan, including covering working capital expenses, purchasing equipment and more.

SBA Export Express loans

  Ideal for export companies requiring fast turnarounds

Many U.S. lenders view export companies as risky businesses, making it challenging to get financing for short- and long-term expenses. Due to this need, the SBA created several options for export companies needing fast funds — including term loans and lines of credit.

The SBA Export Express loan can provide up to $500,000, with terms of up to 84 months if used as a line of credit (terms not specified for term loans). As a line of credit, you can withdraw up to your set limit as often as needed, only paying interest on the withdrawn amounts.

Since you don’t need prior approval from the SBA, you can typically receive a response time within 24 hours. However, it can take up to 90 days after that to get your funds.

SBA Export Working Capital

  Ideal for export companies in need of working capital

The Export Working Capital loan helps companies that generate export sales access the financing they need for working capital, suppliers, inventory and the production of export goods or services.

Loan amounts go up to $5,000,000, with terms up to 36 months if used as a line of credit (terms not specified for term loans). Note that the Export Working Capital loan interest rates are set by the lender — the SBA doesn’t require a capped limit like it does with the other SBA loan programs.

If you want to learn more about competing with the global market, you can reach out to a U.S. Export Assistance Center (USEAC) in your region.

SBA microloans

  Ideal for women, low-income, veteran and minority entrepreneurs requiring smaller loan amounts

SBA microloans are issued to small businesses and nonprofit childcare facilities through nonprofit lenders and community-based organizations. These loans are available up to $50,000 with maximum repayment terms of 72 months. Rates typically range from 8.00% to 13.00%.

The SBA microloan program primarily serves new or early stage businesses in underserved markets. Eligible borrowers include business owners with little to no credit history, low-income businesses, women-owned companies and minority entrepreneurs.

SBA disaster loans

  Ideal for small businesses affected by declared disasters

Disaster loans differ from other SBA loans because the SBA provides disaster funds instead of guaranteeing loans made through intermediary lenders.

The SBA offers low-interest disaster loans to businesses, homeowners and renters in areas where a federally declared disaster occurs. Most disaster loans are available up to $2,000,000.

Business owners can use disaster loans for working capital expenses or other disaster-related business losses that insurance does not cover.

Current types of disaster loans offered by the SBA include:

  • Physical damage loans: If your business is located in a declared disaster area and has been damaged, you can apply for up to $2,000,000 in financial assistance from the SBA.
  • Mitigation assistance: You can apply to receive funding to help protect your business against future disasters, such as floods and earthquakes.
  • Economic Injury Disaster Loans: If you own a business, small agricultural cooperative or nonprofit organized in a declared disaster area and have suffered economically, you might be eligible to receive up to $2,000,000 in government assistance.
  • Military reservist loans: SBA can provide up to $2,000,000 to help with operating expenses if one of your essential employees is a military reservist and is called to active duty.
  • Hawaii wildfires: Businesses of all sizes affected by the Hawaii wildfires can apply for financial assistance with the SBA, although the application filing deadline for economic injury is May 10, 2024, and the deadline for physical damage has already passed.
  • Hurricane Idalia: If your business was affected by Hurricane Idalia and is located in an eligible area in Florida and Georgia, you might qualify for an SBA disaster loan.


  Ideal for lines of credit for short-term or seasonal financing

An SBA line of credit, also called a CAPLine, can help your business cover seasonal or short-term working capital needs. In general, SBA CAPLines are cheaper than traditional business lines of credit. If approved, you can access up to $5,000,000 with repayment terms of up to 120 months.

There are four types of SBA CAPLines to consider:

  • Working capital: Ideal for general business expenses, like paying rent, hiring staff, buying inventory. This is typically the easiest CAPLine to get, but it may come with extra fees.
  • Contract: Can help businesses fulfill specific contracts, such as purchasing materials, paying for contract workers or custom orders.
  • Seasonal: Ideal for covering seasonal changes, such as stocking up on time-sensitive inventory or hiring staff for busy seasons.
  • Builders: Funds can be applied to help cover construction costs for residential or commercial property, such as hooking up utilities, professional landscaping, labor and materials and more.

Note that specific CAPLines may apply additional eligibility requirements — the builders line, for example, requires a track record of completing construction and/or renovation projects.

SBA International Trade loans

  Ideal for companies wanting long-term funding to keep up with foreign competitors

An SBA International Trade loan can help U.S.-based companies develop or improve products and services to sell abroad. Financing goes up to $5,000,000, with terms up to 120 months.

The main purpose of this loan is to help strengthen your business model so you can better compete in the global market.

Here are some examples of how you could use funds from an International Trade loan:

  • Facility upgrades or expansions
  • Equipment financing
  • Participation in overseas trade shows
  • Translation services
  • Debt refinancing

Pros and cons of SBA loans

Not sure if an SBA loan is right for you? Consider the following pros and cons of SBA loans before moving forward.


 Broad eligibility requirements:
Companies unable to secure traditional financing might have better luck qualifying for an SBA loan.

 Capped interest rates:
The SBA sets maximum business loan interest rates based on the prime rate to help make loans affordable for small business owners.

 Access to SBA resource centers:
Small business owners can access resources, training and support via a local SBA resource branch.

 Wide range of funding amounts:
Small business owners can borrow from $500 to $5 million and beyond to cover a range of expenses.

 Longer terms:
SBA repayment terms can go as high as 360 months, versus up to 84 months as seen with other types of small business financing.

 Down payment typically required:
Lenders typically require a 10% to 30% SBA down payment to secure the funds.

 Collateral and/or personal guarantee could be required:
Many SBA lenders require borrowers to provide collateral and/or a personal guarantee to help reduce lender risk.

 Long funding process:
The approval and funding timeline can take up to 60 to 90 days, whereas some online lenders offer same-day business loans.

 Not ideal for low-credit borrowers:
Borrowers typically have better chances of approval with a personal FICO Score of 680 or higher.

Requirements for an SBA loan

Eligible small businesses must meet the SBA’s size standards, which are based on annual receipts or number of employees, depending on industry.

Borrowers also need to meet the basic SBA loan requirements:

  • Be a for-profit business
  • Be physically located and operating in the U.S.
  • Have invested personal equity in the business
  • Have exhausted all other financing options (though you may qualify for an SBA loan if you have other business debt)
  • Meet the job creation and retention requirement for SBA 504/CDC loans (must create or retain at least one job opportunity per every $90,000 guaranteed by the SBA)

Having a personal credit score of at least 680 with a business history of two or three years can improve your chances of qualifying for an SBA loan. However, new businesses that have been operating for less than two years can consider an SBA microloan for startup financing.

 Things to keep in mind 

You are personally responsible for the debt: If your business defaults on an SBA loan, you would personally be on the hook to repay it if you own at least 20% of the business. And if you pledged any collateral, your lender could seize and liquidate those assets and apply the value to your remaining balance.

Seek assistance when you need it: If you need help navigating the application process and requirements, you can turn to a Small Business Development Center (SBDC) in your area. The national network of SBDCs operate in partnership with the SBA to provide no- or low-cost assistance to small business owners.

How to get an SBA loan

While the SBA oversees the SBA loan program, it doesn’t issue funds directly, and the application process can be extensive.

You must apply through a bank, credit union or alternative lender that offers SBA loans. Both the lender and the SBA need to review your application before approving your loan, though some lenders may have authority to independently approve SBA business loans.

To apply for an SBA loan:

1. Find a local lender

The SBA’s Lender Match tool connects prospective borrowers with SBA loan lenders in their area. The tool could provide a starting point when searching for lenders, though you’re not guaranteed to get matched. But if you do receive interest from various banks, be sure to ask about their specific rates, terms and fees, as banks can set their own costs within the SBA’s limits.

Before speaking with lenders, you should have an idea of how much you’d like to borrow and how you would use the money. It would also be best to determine ahead of time if you have any assets you could use to collateralize your loan, if needed.

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2. Choose the type of loan

You have multiple options when it comes to types of SBA loans for small businesses. Picking the best one depends on your business’s unique needs.

If you plan to purchase or renovate commercial real estate, a CDC/504 loan could be a good choice. However, a 7(a) loan is better suited for companies needing to cover general operating expenses. And if you’re pressed for time or need to cover emergency expenses, the SBA Express Loan could be a good fit.

If you’re unsure which option is best for you, talk with your lender about the various SBA loans available.

3. Gather documents

The SBA application requires a number of forms and documents. While the exact requirements vary by lender and loan type, here are some standard forms you will likely need:

  • Your SBA loan application form (SBA Form 1919)
  • Personal financial statement (SBA Form 413)
  • Business plan
  • Current business income statement and balance sheet
  • Business tax returns for the previous three years
  • Cash flow projections (month-by-month, for one year)
  • Real estate purchase agreements (when buying real estate with SBA loan proceeds)
  • Articles of organization
  • Business licenses and registrations
  • Collateral information
  • Documentation of any lawsuits, judgments or bankruptcies

4. Apply and review

Having a mentor or business advisor review your SBA loan application before submitting can help strengthen your application and ensure you have all required documents included.

You can typically submit an SBA loan application online, although some traditional banks might require a phone call or in-person appointment.

If approved, the lender will need to get the SBA’s approval before moving forward. During this stage, you might need to submit additional documentation. Remember, some lenders are able to approve SBA loans without this extra step.

You will then receive a business loan agreement outlining your loan’s conditions and terms. Be sure to thoroughly review this document and ask your lender for clarification if you don’t understand any of the legal terms.

How long does it take to get an SBA loan?
The SBA application and approval process can be quite lengthy, taking approximately 30 to 60 days to process and fund, or up to 90 days for real estate loans.If your business needs money fast, you may want to consider shopping for a business loan from an online lender. While these lenders can approve and fund your loans in as little as one to three business days, you’ll likely pay a higher interest rate with shorter repayment terms.Another option is to work with an SBA Preferred lender, which can shorten your wait time to just two weeks instead of several months.

Alternatives to SBA loans

While an SBA small business loan can help many businesses access the funds they need to take their companies to the next level, it might not be the best fit for you. If you can’t meet the SBA loan qualifications or need a shorter timeline, you may want to consider other lending options.

Loan typeIdeal for…AmountsTermsAverage interest ratesTime to funding
Short-term online loansShort-term and low-cost expenses like inventory, equipment, payroll and marketing campaigns$2,000 to $1.5 million3 to 24 months3% to 60.9%Same day to 3 business days
Lines of creditUnexpected or ongoing business expenses, such as inventory, payroll or seasonal fluctuations in revenue$1,000 to $250,0003 to 60 months3% to 39.90%1 to 14 business days
Business credit cardsShort-term or daily expenses that can be paid off within the monthVaries based on your credit profileOngoing13.24% to 35.99% (Some cards have 0% intro APR offers)7 to 14 days
Invoice factoringCompanies wanting to use their unpaid invoices to receive quick cash advancesUp to $30 millionNot applicableStarting factor fees (discount rate) 0.55% to 8.25%Same day to 48 hours

Frequently asked questions

It’s generally easier to qualify for an SBA loan than a traditional bank loan, especially since the SBA program offers options for low-income businesses and startups. That said, you typically need a personal credit score of 680 or higher and at least two to three years in operation to qualify for the SBA 7(a) loan.

If you’re not sure your business is eligible for SBA financing, reach out to an SBA lender in your area to discuss options. You can also check and monitor your credit score for free with LendingTree Spring to see where you stand.

Since SBA microloans are designed for business owners with little to no credit, the lender may place more weight on your business plan and future cash flow projections instead of requiring a robust credit score.

You can also consider other microloans outside of the SBA network. For example, nonprofit lender Kiva can provide up to $15,000 with 0% interest rates for diverse entrepreneurs around the world.

SBA funding limits depend on the type of SBA loan. SBA 7(a) loans can go as high as $5,000,000, while CDC/504 loans can fund up to $5,500,000 for certain projects. If you pick an SBA Express Loan, you can get up to $500,000. And microloans have the smallest funding limits, only lending up to $50,000, although the SBA reports that the average microloan is about $13,000.