The Small Business Administration (SBA) is a government agency that has a mission of supporting small business owners, whether it is helping them recover, open up shop, or expand. Through its SBA loan programs, it insures many loans offered through private lenders, something that allows SBA loans to have competitive rates due to the reduced likelihood of financial loss that lenders have in issuing a loan in the event of a default.
The SBA offers different types of lending programs, each with varying rates, terms, and allowable uses. The best one will vary according to your business’s needs, qualifications, and the intended use of the money.
- SBA 7(a) loans: The SBA’s most popular program that can provide up to $5 million in working capital
- SBA Working Capital Pilot: A temporary program offering credit lines for working capital
- SBA Express loans: Provides faster funding speeds with up to $500,000 in financing
- SBA Export loans: Designed to fund businesses that have significant export sales or international operations
- SBA CAPLines: Line of credit options to help companies with cyclical or seasonal needs
- SBA Certified Development Company (CDC)/504 loans: Long-term financing of up to $5.5 million for assets that promote job growth or job creation
- SBA Microloans: Smaller working capital loans up to $50,000
- SBA Disaster loans: Funding for businesses impacted by a declared disaster
SBA loan programs at a glance
Loan program | Maximum loan amount | Maximum interest rate | Maximum repayment term | Collateral required? | Estimated funding speed |
|---|---|---|---|---|---|
SBA 7(a) | $5 million | 10.50% to 15.50% | 10 years (25 years for real estate) | Typically required | 45 to 90+ days |
SBA Working Capital Pilot (WCP) | $5 million | 10.50% to 15.50% | 5 years | Typically required | 30 to 90+ days |
SBA Express | $500,000 | 10.50% to 15.50% | 10 years for credit lines | Typically required | 10 to 45 days |
SBA Export | $5 million | 10.50% to 15.50% | Up to 7 years for credit lines | Typically required | Up to 90+ days |
SBA CAPLine | $5 million | 10.50% to 15.50% | 10 years | Typically required | 30 to 90+ days |
SBA CDC/504 | $5.5 million | Varies | 25 years | Typically required | 2 to 4+ months |
SBA Microloan | $50,000 | Typically 8% to 13% | 7 years | Typically required | 30 to 90+ days |
SBA Disaster Loan | $2 million | Up to 4% | 30 years | Typically required | 30 to 60+ days |
1. SBA 7(a) loans
Rates & Terms | |
Maximum interest rates |
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Maximum loan amount |
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Repayment term | 10 years (25 years for real estate) |
Funding speed | 45 to 90+ days |
Examples of allowable uses |
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Qualifications | |
Credit score | 680 recommended but varies by lender |
Time in business | 2 years recommended but varies by lender |
Annual revenue | Varies by lender but recommended to have a history of profitability |
Debt service coverage ratio (DSCR) | 1.25x recommended but may vary by lender |
Down payment | 10% minimum |
Collateral | Yes, typically required |
How SBA 7(a) loans work
The SBA 7(a) loan program is the SBA’s most popular lending program. It offers a large amount of maximum funding, as well as a wide range of allowable uses for the loan proceeds to include:
- Acquiring, refinancing, or improving real estate
- Working capital
- Refinancing current business debt
- Costs associated with purchasing and installing business equipment, such as machinery, furniture, fixtures, and supplies
- Covering costs associated with a change in business ownership
Notably, the 7(a) loan program also has different sub-programs that can be selected. For example, this includes SBA Express, Export, and CAPLines programs. I cover these in greater detail further below in this guide.
From a historical perspective, the SBA also used to offer the Community Advantage program as part of its 7(a) offerings. Although the program was sunset in 2023, you can read our article on Community Advantage loans to see how they were structured.
To learn more about rates, fees, terms, and qualification requirements for SBA 7(a) loans, visit our SBA 7(a) loans guide. There, you’ll find information on how to apply for a loan and alternative financing options.
2. SBA Working Capital Pilot (WCP) loans
Rates & Terms | |
Maximum interest rates |
|
Maximum loan amount | $5 million |
Repayment term | 5 years |
Funding speed | 30 to 90 days |
Examples of allowable uses |
|
Qualifications | |
Credit score | 680 recommended but varies by lender |
Time in business | 1 year recommended |
Annual revenue | Varies by lender but recommended to have a history of profitability |
Debt service coverage ratio (DSCR) | 1.25x recommended but may vary by lender |
Down payment | 10% minimum |
Collateral | Yes, typically required |
How SBA WCP loans work
The SBA WCP program is a pilot program that began August 1, 2024 and is scheduled to run through July 31, 2027. It provides credit lines of up to $5 million, and it’s a more suitable fit for those operating in industries like manufacturing, wholesale, or professional services, with at least a year of operating history.
As a relatively new program, WCP was designed to take features of the SBA’s other credit line products, and allow more businesses to take advantage of the flexibility to draw funds on an as-needed basis. Eligible businesses can get one-on-one counseling with the SBA’s subject matter experts, and be able to use funds for a wide range of working capital needs, including domestic and export purposes.
In order to find a lender offering this program, the SBA recommends utilizing its Lender Match tool to find a suitable company in your area.
3. SBA Express loans
Rates & Terms | |
Maximum interest rates |
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Maximum loan amount | $500,000 |
Repayment term | 10 years for revolving credit lines |
Funding speed | 10 to 45 days |
Examples of allowable uses |
|
Qualifications | |
Credit score | 680 recommended but varies by lender |
Time in business | 2 years recommended but varies by lender |
Annual revenue | Varies by lender but recommended to have a history of profitability |
Debt service coverage ratio (DSCR) | 1.25x recommended but may vary by lender |
Down payment | 10% minimum |
Collateral |
|
How SBA Express loans work
While SBA Express loans don’t offer as much funding as most other SBA loan programs, Express loans can typically be funded more quickly. This is because the Express program allows lenders to use their own approval processes and guidelines without requiring a second review from the SBA itself. By comparison, many of the SBA’s other loan programs require lenders to submit loans to the SBA for separate approval, something that can add weeks to approval and funding timelines.
Head to our SBA Express loans guide to learn more about rates, terms, and qualification requirements. We also cover the different financing options of a line of credit vs a term loan and where you can go to get one of these loans.
4. SBA Export loans
Rates & Terms | |
Maximum interest rates |
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Maximum loan amount |
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Repayment term |
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Funding speed |
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Examples of allowable uses |
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Qualifications | |
Credit score | 680 recommended but varies by lender |
Time in business | 2 years recommended but varies by lender |
Annual revenue | Varies by lender but recommended to have a history of profitability |
Debt service coverage ratio (DSCR) | 1.25x recommended but may vary by lender |
Down payment | 10% minimum |
Collateral |
|
How SBA Export loans work
SBA Export loans consist of the standard SBA Export Express, Export Working Capital, and International Trade programs:
- SBA Export Express: This program is designed to issue funding on an accelerated timeline by giving lenders the delegated authority to issue loan approvals and funding decisions without requiring the SBA’s separate approval. Funds can be used to help small businesses develop the export side of the company.
- SBA Export Working Capital: This loan program can provide funding to companies that need additional working capital to support additional export sales. It offers more funding than the standard SBA Export program, although it can take longer to get approved and funded.
- SBA International Trade: This program can provide financial assistance to businesses that want to grow and develop export markets. This includes financing facilities and equipment for goods or services that will be used in international trade.
5. SBA CAPLine loans
Rates & Terms | |
Maximum interest rates |
|
Maximum loan amount | $5 million |
Repayment term | 10 years |
Funding speed | 30 to 90+ days |
Examples of allowable uses |
|
Qualifications | |
Credit score | 680 recommended but varies by lender |
Time in business | 12 months but may vary by lender and loan program |
Annual revenue | Varies by lender but recommended to have a history of profitability |
Debt service coverage ratio (DSCR) | 1.25x recommended but may vary by lender |
Down payment | 10% minimum |
Collateral | Typically required |
How SBA CAPLine loans work
The SBA CAPLine program is intended to help businesses with short-term needs. This can include cyclical or seasonal expenses. The SBA CAPLines program has four different types of loans available, some of which offer revolving and nonrevolving financing options:
- Seasonal CAPLine: This type of loan requires applicants to be in business for at least 12 months, with the ability to show seasonal activity. Funds can be used to cover increased costs of inventory, labor, and accounts receivable due to this seasonality.
- Contract CAPLine: Your eligibility for this loan will be determined based on your past performance as a contractor. You must show the ability to operate with a profit based on other similar projects and possess the necessary knowledge, expertise, and financial ability for the project. Loan proceeds may only be used to finance associated costs with the specified contracts indicated in your loan application.
- Builders CAPLine: This requires you to be a construction contractor or homebuilder. Loan proceeds must be used for expenses directly associated with the construction or renovation costs of a specific project. Some examples can include labor, supplies, equipment rentals, materials, permitting fees, and landscaping.
- Working CAPLine: Businesses must have accounts receivable or have inventory to be eligible for this loan. Although some exceptions exist, proceeds must typically only be used for short-term working capital and operating needs.
If you want to learn more about rates, terms, qualifications, or how to get an SBA CAPLine, you can check out our guide on the SBA Line of Credit.
6. SBA CDC/504 loans
Rates & Terms | |
Maximum interest rates |
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Maximum loan amount | $5.5 million |
Repayment term | 10, 20, and 25 years |
Funding speed | 2 to 4+ months |
Examples of allowable uses |
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Qualifications | |
Credit score | 680 recommended but varies by lender |
Time in business | 2 years but can vary per lender |
Annual revenue | Net income must not exceed $5 million for the past two years |
Debt service coverage ratio (DSCR) | 1.25x recommended but may vary by lender |
Down payment | 10% minimum |
Collateral | Typically required |
How SBA CDC/504 loans work
SBA 504 loans have two separate funding sources. CDCs provide 40% of funding, while an SBA-approved lender provides 50%. The remaining 10% must come as a down payment from the borrower.
According to the SBA, this program can provide up to $5 million in financing for major fixed assets that promote business growth and job creation. Certain energy projects, however, allow for up to $5.5 million in financing.
Since an SBA 504 loan is funded from different sources, you can see different interest rates on the various portions of your loan. Rates on the CDC portion of the loan are tied to the current market rate for 10-year United States Treasury Bonds while the lender portion can vary depending on who you get the loan from.
To get an SBA 504 loan, you must find a CDC to work with. This can be done by using the SBA’s Lender Match tool. If you’re unsure if this loan is right for you, check out our SBA 504 loan guide for more details on how these loans work, fees, how rates are determined, and how to qualify.
7. SBA Microloans
Rates & Terms | |
Maximum interest rates | Typically 8% to 13% |
Maximum loan amount | $50,000 |
Repayment term | 7 years |
Funding speed | 30 to 90+ days |
Examples of allowable uses |
|
Qualifications | |
Credit score | 680 recommended but varies by lender |
Time in business | 2 years but can vary per lender |
Annual revenue | Varies by lender but recommended to have a history of profitability |
Debt service coverage ratio (DSCR) | 1.25x recommended but may vary by lender |
Down payment | 10% minimum |
Collateral | Typically required |
How SBA Microloans work
SBA Microloans can be a good fit for businesses that only need small amounts of funding. The maximum loan amount is $50,000, and the SBA states that most microloans are around $13,000. Microloans can be provided to small businesses and certain not-for-profit childcare centers.
These loans are issued through intermediary lenders, each of which can establish its own set of lending requirements. Loan proceeds can be used for a wide range of expenses that can help your business grow. This can include rebuilding, repairing, or otherwise improving various aspects of your company.
Check out our detailed guide on SBA microloans for more information on allowable uses of funds, rates, and eligibility criteria. If you’re looking to apply for this type of loan, you can find a lender by using the SBA’s list of microlenders.
8. SBA Disaster loans
Rates & Terms | |
Maximum interest rates | Up to 4% |
Maximum loan amount | $2 million or 24 months of economic activity |
Repayment term | Up to 30 years |
Funding speed | 30 to 60+ days |
Examples of allowable uses |
|
Qualifications | |
Credit score | 570 (625 for loans greater than $500,000) |
Time in business | None |
Annual revenue | Must be sufficient to repay the loan |
Collateral | Required for loans over $25,000 |
How SBA Disaster loans work
SBA Disaster loans are designed to help businesses continue normal operations if they have been impacted by a declared disaster. Examples of qualifying disasters can include earthquakes, floods, hurricanes, and wildfires. You can visit the SBA website to see the history of past and current declared disasters.
Funds can be used to help a company stay in business and continue daily operations. This can include working capital, conducting repairs, or replacing damaged equipment.
Businesses that apply and get approved for funding typically also receive a grace period in which no repayments are required. This can be from three to six months or more depending on the severity of the disaster and scope of impact on the business.
View our guide on SBA Disaster loans to learn more about who they’re for, prohibited uses of funds, different types of disaster loans you can get, and typical rates and terms. Unlike other SBA loan programs that require you to find an approved lender to submit an application, this loan program allows you to apply directly through the SBA website.
How to get an SBA loan & other qualification requirements
With a few exceptions, such as the SBA’s Disaster loan program, getting an SBA loan will require you to apply with a financial institution that offers this type of financing. This can include banks, credit unions, online lenders, and business loan brokers. You can accomplish this by following our four-step process on how to get an SBA loan.
An important thing to keep in mind when you apply for an SBA loan is that while a lender can establish its own set of eligibility criteria, you’ll need to also meet general qualification requirements set forth by the SBA. We’ve summarized these below, and you can view our SBA loan requirements guide for more details.
- You must operate as a for-profit business in the US.
- You must meet the criteria of a small business (you can use the SBA’s size standards tool for assistance).
- You must demonstrate you have been unable to obtain financing elsewhere.
- Your company is deemed to be of good character.
Frequently asked questions (FAQs)
SBA loans typically take anywhere from 30 to 90-plus days to get. Some options, such as the SBA Express loan program, can be funded in as little as 10 to 14 days. SBA-approved lenders also tend to be able to issue approvals and funding more quickly since they have the delegated authority to make decisions with a separate review from the SBA itself.
Yes, SBA loans can be challenging to get because most require good credit and finances to qualify. Documentation requirements also tend to be more comprehensive than other types of traditional financing methods. In exchange, however, SBA loans can offer some of the most competitive rates and terms. To improve your approval odds, you can see some tips and recommendations in our guide on how to get a small business loan.
The best SBA loan will be one that you’re eligible to get with terms that suit your business needs. SBA loans may have prohibited uses depending on the loan program you apply for, so you should consider whether you’ll be allowed to use the funds for your intended purposes.
Bottom Line
SBA loans can offer some of the most competitive rates and terms, and they’re popular in a number of different industries. If you’re thinking of applying for an SBA loan, keep in mind that the SBA provides several different loan programs, each with varying rates, qualifications, and terms. Consider your eligibility and your intended use of the funds as many SBA loan programs prohibit funds from being used for certain items.
