Lending Library

Getting approved for an SBA loan is a big step and a huge relief for many small business owners. But approval doesn’t mean funds in hand. This guide breaks down what happens next, so you can stay ahead of the process and avoid delays.

If your SBA loan was just approved, take a moment to celebrate. You’ve passed the biggest hurdle in the process! But before those funds land in your account, you’ll need to complete one more important stage. SBA loan closing.

This stage is often misunderstood, especially by first-time borrowers. That’s why we believe it’s essential to provide small business owners with a clear understanding of what comes next.

So, in this guide, we’ll walk you through what happens after approval, what documents you'll need, and how long closing typically takes, so you can stay ahead and put your capital to work without delay.

Why SBA loans take time to close

SBA loans take longer to close than traditional loans because there’s more red tape. Since they’re partially backed by the government, lenders have to check every box (collateral, permits, compliance paperwork, etc.) before the funds are released.

Borrowers can support this process by staying proactive and organized, for example, by responding promptly and keeping documents up to date. This goes a long way towards avoiding unnecessary delays and keeps closing on track.

Please read our guide on what an SBA loan is to better understand how they work and why the closing process is more involved.

What happens after SBA loan approval?

After your SBA loan is approved, your lender will send over a Loan Commitment Letter. This lays out what needs to happen before closing can move forward, and usually covers:

• How much you’re approved to borrow, and at what rate
• The repayment plan you’ve agreed to
• Any collateral you’ll need to provide
• Additional requirements (e.g., insurance, permits, or licenses) that must be in place before funding

It’s worth going through this letter carefully. If anything looks off or unclear, ask your lender now rather than later. A quick conversation upfront can save you time and frustration down the line.

If you want to get a head start on your prep, read our guide on how business loans and taxes work to make sure you’re set up for tax season.

Key steps in the SBA loan closing process

The SBA closing process is pretty straightforward once you know what’s coming. While the exact steps vary depending on your loan and business, most borrowers go through a similar checklist:

1. Document collection and verification

Lenders often ask for fresh copies of key paperwork, even if you already submitted them earlier. This is because they need to confirm that your business still matches the terms of your approved loan.

In light of that, expect to resend things like:

• Personal and business financial statements
• Business licenses, permits, and insurance certificates
• Proof of business structure (such as Articles of Incorporation or an LLC Operating Agreement)
• Lease agreements or property-related documents (if real estate is part of the loan)

If anything is outdated or missing, your lender may pause the process. So, gathering these items in advance helps keep things on track.

2. SBA-specific documentation

After reviewing your paperwork, your lender will move on to the final SBA forms:

SBA loan authorization: This spells out the terms, things like the loan amount, interest rate, repayment schedule, collateral, and any extra conditions attached.

Proof of flood insurance (if applicable): If your loan involves real estate in a designated flood zone, flood insurance must be in place before closing. The policy must meet federal standards and name your lender (or the SBA) as the loss payee.

Environmental due diligence: If the loan includes commercial real estate (especially properties with past or current uses that may pose environmental risks), your lender may require a Phase I Environmental Site Assessment to identify any concerns.

Certification of use of proceeds (SBA form 1050): This form is required for all 7(a) loan disbursements. You and your lender must complete it at closing to confirm how funds will be used, consistent with the loan authorization. Supporting documentation (like invoices or wire confirmations) may also be required.

Other SBA forms and certifications: Depending on your loan type and business situation, you may be asked to complete additional documents, such as:

• SBA Form 159 (if you paid a broker or agent)
• IRS Form 4506-C (to verify business tax returns)
• Hazard insurance documentation (for collateral)
• Borrower certifications confirming no material changes since loan approval.

3. Legal and compliance requirements

Once the SBA-specific paperwork is out of the way, your lender will move on to the legal checks to confirm that your business is on solid legal ground and that everything meets SBA program rules.

You may be asked to:

• Sign legal documents that reflect the final loan terms
• Show that you’ve invested some of your own money into the business
• Provide proof that your location complies with zoning laws or environmental rules
• Back the loan with a personal guarantee or collateral

These steps are all about protecting both you and your lender while keeping everything above board.

Since SBA loans often require personal guarantees or assets as collateral, it’s worth understanding what happens if you default on an SBA loan and how to protect yourself.

4. Lender due diligence and final review

Right before closing, your lender will go over the details one last time to make sure everything lines up before funds are released. That could mean:

• Taking a second look at the title report, especially if real estate is involved
• Making sure all the collateral paperwork is in the file
• Following up with any lingering questions from underwriting

It’s routine, but important because it’s how lenders protect both sides before the loan goes live.

5. Signing the closing documents

This is the part where everything becomes official. You’ll go over the final loan agreement and sign documents like the promissory note, personal guarantee, and security agreement.

However, if real estate is part of your loan, there’s usually extra paperwork involved, like a deed of trust or lien filings. Some of those documents may need to be notarized. But don't worry, your lender will tell you what’s needed and when. These days, many lenders offer digital signing options to make things easier

6. Disbursement of funds

After you’ve signed all the paperwork and your lender has done a final review, the funds can be released.

How that happens depends on your loan and what it’s being used for:

Lump sum: For some loans, such as those primarily for working capital or refinancing existing debt, the full loan amount may be disbursed all at once directly into your business bank account.

In stages (draws): For projects involving construction, major renovations, or phased equipment purchases, funds are typically released in stages. This "draw" process allows the lender to monitor project progress and verify that funds are used appropriately at each phase.

Direct to third parties: Sometimes, the funds don’t go straight into your account. Depending on your loan terms, the lender might send the money directly to vendors like equipment suppliers or business sellers, or place it in an escrow account managed by a title company. This helps make sure the money gets used exactly as approved.

The typical timeline for fund disbursement is generally within 7–21 business days after the loan closing documents are signed. While some lenders, particularly those with highly streamlined or digital processes, may be able to release funds faster, it's prudent to anticipate this timeframe.

Get ready to put your capital to work

Once you close, the hard part is behind you. Now it’s time to focus on growth. It doesn't matter whether you’re purchasing new equipment, expanding to a second location, or managing seasonal cash flow; your loan is likely the key to moving your business forward.

Interested in a SBA loan? Lendio stays in your corner every step of the way, offering tools, expert guidance, and support when it matters most. If you're planning your next big move, our team is ready to help you make it happen. Start your SBA loan application today.

A healthy credit score can open doors for business growth—whether you’re applying for financing, securing better rates, or simply keeping your financial footing strong. But for many small business owners, a less-than-perfect personal credit score can be a major roadblock. 

The good news? It can be improved with time, strategy, and the right steps. We’ll cover what you need to know to improve your credit, and offer you tips on what high-impact moves you can make to start boosting your credit score today.

Do personal credit scores impact business credit scores?

Personal credit scores do affect your business credit, especially early on. Many lenders use your personal credit to evaluate your ability to manage debt, and in some cases, they’ll require a personal guarantee. That means your business's financial behavior can also impact your personal credit.

As your business matures, strong business credit habits (like on-time payments and positive tradelines) reduce the weight of your personal score. You should always expect that small business lenders will check your personal credit score on loan applications, though, so it’s important not to lose sight of maintaining your personal credit health.

Want to learn more about personal credit scores vs. business credit scores? Read our guide.

Set realistic expectations about increasing your credit score fast 

If you find yourself sitting in front of Google, searching “how do I raise my credit score in 30 days,” you’re not alone. Wanting to improve your credit score quickly in order to continue with your business goals is common. However, you will only become more frustrated if you have unrealistic expectations. There are often no overnight miracles when it comes to boosting your credit score. Many of the factors that determine your credit score rely on historical data. For example, payment history scoring can only improve with time.

However, there are strategic moves you can make over 3, 6, and 12 months that will create a noticeable bump in your overall personal credit score. By focusing more narrowly on high-impact changes to the factors that weigh heavily on your credit score, you can see noticeable improvements within 6 months.

Your starting credit score matters

Another factor to consider in how fast your credit score can improve is the score you’re starting with. Credit score ranges will have an impact on how fast your credit score can realistically improve in a short window.

If your score starts in the low 500s, aggressive action—like reducing debt and fixing errors—can lead to 50–100 point gains within six months. If you’re starting in the 600–700s, changes may be more gradual (e.g., 20–50 points) as your profile nears the top tier.

We’ll break down some realistic moves to improve your credit score fast in the next section.

Your timeline to better credit: what to do in the next 3, 6, and 12 months

If your goal is to boost your credit score quickly, you’ll want to start with the actions that will have the most impact based on how credit scores are calculated and your starting credit score.

What to focus on in the first 3 months

At this stage, focus on quick wins that move the needle fast: reduce utilization, make consistent payments, and correct any errors.

What to focus on in the next 6 months

At this stage, you can build on your previous moves by introducing new strategies to build depth and a healthy mix into your credit profile.

What to focus on in the next 12 months

At this stage, you will focus on long-term gains through consistency and diversification.

Assuming you take these actions at each stage of the timeline, and then continue applying best practices from each stage while building on the prior period's progress, these are the score improvements you might see after 12 months.

7 ways to improve your credit score

Regardless of your credit score or desired timeline for improvement, these tactical tips will help you improve your credit score, especially when combined consistently over time.

1. Pay every bill on time

Impacts: Payment History (35%)

Payment history is the single most important factor in your credit score. It shows that you can handle debt and be trusted to pay it back. When you miss payments by 30+ days, whether it’s a credit card, utility bill, or loan, it can have a negative effect on your credit report for 7 years, depressing your score. Paying your bills on time is by far the best thing you can do to rebuild less-than-stellar credit.

Tip: Set up automatic payments or calendar reminder alerts for minimums. Even one missed payment can cost you a lot of points if your score is already struggling.

2. Keep credit card balances below 10% of your limit

Impacts: Credit Utilization (30%)

While 30% is commonly advised, 10% or lower is the real sweet spot. Anything above 10% will chip away at that 30% of the overall credit score affected by credit cards:

• A 10−30% balance takes away up to 10%
• A 30–50% balance takes away 10−25%
• A 50−90% balance takes away 25–90%

Tip: If your card has a $5,000 limit, aim to keep the balance under $500 at any point in the billing cycle. This is because credit utilization resets monthly. A high balance—even if paid off later—can spike your usage rate temporarily and drag your score down.

What if you don’t have an active credit card?

Without recent revolving credit, you may be missing a huge portion of your score potential. If you’re consistently at a 0–7% balance-to-limit ratio, credit models may read that as inactive usage, not responsible credit behavior. 

Additionally, it may be one of the best tools available for building a strong credit history, which is essential for achieving your business goals, such as securing financing.

3. Become an authorized user on someone's good account

Impacts: Length of Credit History (15%) + Credit Mix (10%)

Piggybacking on a well-managed, older account can give your score a boost, especially if your credit profile is thin or new. Have someone you know, such as a spouse or a family member, add you as an authorized user of their credit card. You’d have to ask the person to do this, and if they agree, they would add you, receive the credit card in your name linked to their account, and pass it off to you.

Some things to keep in mind: Just as you will benefit from the person’s good habits, that person can take a credit hit if you abuse the authorization you’ve been given, so treat it with respect (remember, they're still on the line for all charges). And don’t get yourself authorized on too many accounts. Credit agencies will flag that as you artificially raising your score.

Tip:  Make sure the account has low balance and a long positive payment history. And it goes without saying, only piggyback with someone you trust, and who trusts you.

4. Dispute any errors on your credit report

Impacts: All score factors (depending on nature of errors)

According to the Fair Credit Reporting Act, your credit agency is required to show you your credit report at least once a year at no charge. Take full advantage of that right.

You may have credit dings you don’t know about or that don’t belong on your credit report. You have the right to challenge them and request they be removed. 

Tip: Go through your credit report each year— and be thorough. Even a few inconsistencies can add up quickly and could be the difference between a red flag and a green light for funding.

5. Use existing accounts strategically

Impacts: Credit Mix (10%), Credit Utilization (30%), Credit History (15%)

Using dormant lines (like a personal line of credit or store card) can show active, responsible credit behavior—without opening new accounts.

Your credit history is an average of all your open and active credit accounts. A good credit history with credit—any credit—can positively impact your score. If you have a line of credit that you've not used, consider paying expected expenses with it and then paying back the line of credit with the money you already put aside in your checking account to pay those bills.

Do: Make small, recurring charges on your older cards to keep them active

‍Don’t: Open a new card just to get a discount or points. It lowers the average age of your accounts and causes a hard inquiry.

6. Limit hard credit inquiries

Impacts: New Credit (10%)

Applying for multiple credit cards or loans in a short period can lower your score—especially if you’re already rebuilding.

If you're thinking about applying for a new card and maintaining a low balance, proceed with caution: you won't want to apply for a lot of new credit at the same time. The reason for this has to do with “credit inquiries” or "credit checks" (also called a "credit pull"), which is the term used when a lender, broker, partner, or vendor checks your credit score.

A “hard inquiry” is what you want to avoid when trying to rebuild credit because each one negatively impacts your credit score. The less credit you apply for, the fewer hard inquiries your credit score will show.

Tip: Be strategic. Rate shop within 14–45 days if applying for loans (FICO treats this as one inquiry). Otherwise, space out applications and avoid “just browsing” preapprovals that trigger hard pulls.

7. Avoid spending behavior that signals risk

Impacts: Lender perception and soft underwriting

Some lenders use algorithms that analyze changes in your spending behavior. Large purchases (weddings, legal fees), sudden drop in payments, or maxing out credit cards can be red flags even if you pay on time.

Tip: Keep consistent, modest usage. Avoid signalling financial instability when you’re rebuilding credit.

Key Takeaways: How to Improve Your Credit Score

• Focus on what matters most. Your payment history and credit utilization make up 65% of your credit score—prioritize on-time payments and keeping balances low.
• Start where you are. The lower your starting score, the more dramatic gains you may see early on. But everyone benefits from consistent credit-building habits over time.
• Think in timelines, not overnight fixes. Small, strategic moves over 3, 6, and 12 months can lead to meaningful credit improvements—especially if you keep building on what’s working.
• Stay consistent. Credit improvement is a marathon, not a sprint. Monitor your progress, avoid setbacks, and stay focused on long-term financial health.

SBA loan rates are tied to a base rate that changes with the market. Lenders can charge borrowers a rate that falls somewhere between the base rate and the maximum set by the government.

Current SBA rate maximums range from 10.5% to 15.5%.

Explore the most popular SBA loan programs and their rate structures to find out which one is the best fit for your company. 

Before we dive in, get familiar with the basics in our SBA loans overview- a great place to start if you're exploring funding options.

How SBA loan interest rates work.

SBA loan rates are regulated by the U.S. Small Business Administration. Private lenders negotiate their own rates with each individual borrower. But the offered loan rate cannot exceed the maximum set by the SBA for each loan program. 

The maximum is tied to a base rate, which can be one of the following:

• Prime rate: The most commonly used rate, currently at 7.5%
• Optional peg rate: Updated quarterly by the SBA based on market conditions, currently 4.63%

The borrower is then charged a markup (a percentage over that base rate). That varies based on:

• Loan amount
• Type of SBA loan
• Loan maturity date

Current SBA loan rates (August 2025).

Here is how each SBA interest rate breaks down, based on the loan program and other details. 

SBA 7(a) loan rates

SBA 7(a) loans can be used for general working capital needs and have interest rates that can either be variable or fixed. Fixed rates have a higher premium but never change, even if the base rate increases over time.

SBA 7(a) rates range from 3% to 8% above the base rate. Use the following table to compare rates for different loan sizes and term lengths. The current (August 2025) Wall Street Journal Prime Rate is 7.50%.

Historical Prime rates

SBA 504 loan rates

SBA 504 loans are designed to purchase assets that help with job creation or business growth, such as new facilities, machinery, or renovating an existing property. These loans are available through certified development companies (CDCs) and offer fixed interest rates.

You can apply for either a 10-year or a 20-year repayment period. The SBA 504 rates are incrementally pegged above the current rates for 5-year and 10-year U.S. Treasury issues. The rate typically totals 3% of the loan amount. 

Historical U.S. Treasury rates

SBA Microloan loan rates

Microloans from the SBA help newer small businesses with startup or expansion costs. Borrowers can get approved for up to $50,000, although the average loan size is $13,000. The maximum repayment term is six years.

Microloan rates are based on the lender’s cost of funds.

Loans over $10,000: 7.75% over cost of funds

Loans of $10,000 or less: 8.5% over cost of funds

Expect SBA microloan rates to range from 8% to 13%. 

SBA Express loan rates

SBA Express loans allow for a shorter approval time, so you can get faster access to capital. In fact, you'll get an initial response within 36 hours. The maximum loan amount is capped at $500,000 and rate maximums are the same as SBA 7(a) loans.

SBA Community Advantage loan rates

The SBA Community Advantage loan program was created to help businesses in underserved markets. These loans were capped at $350,000. Interest rates were negotiated by the lender but were subject to the SBA's maximums. This program was sunsetted in October 2023.

Lenders under this program are now licensed as Community Advantage Small Business Lending Companies in the 7(a) loan program and will continue to provide access to financing to underserved communities.

Typical SBA loan fees

In addition to paying interest on SBA loans, borrowers may also pay an upfront SBA Guaranty Fee.

Upfront fee on SBA 7(a) loans

This fee is based on the approved loan amount, including both the guaranteed and the unguaranteed portions.

To calculate monthly payments for your SBA loan, visit our SBA loan calculator. Need help finding the best interest rate for your SBA loan or other business term loan?

Apply with Lendio today!

Because small businesses are so critical to the country’s success, the federal government launched the Small Business Administration (SBA) to help foster American small businesses. 

The most popular way the SBA furthers its mission is through SBA 7(a) loans—if your business qualifies, you can get funding backed by the government that can help take your enterprise to the next level.

What is an SBA 7(a) loan?      

An SBA 7(a) loan is a form of financing that is partially guaranteed by the U.S. Small Business Administration. These loans are named after Article 7(a) of the Small Business Act of 1953, which launched the SBA and tasked the agency with supporting American small businesses through lending.

SBA 7(a) loans are popular for financing real estate purchases, working capital, and purchasing furniture and supplies. They’re also commonly sought for refinancing existing business debt.

Are all SBA loans 7(a) loans?

SBA 7(a) loans are the most popular type of loans offered by the SBA, so many people refer to them as “SBA loans”. Keep in mind that 7(a) loans are a specific loan program offered by the SBA, and there are several types of 7(a) loans. In addition, the SBA offers other types of loan programs, such as the 504 loan program, that don’t fall under this umbrella.

What can an SBA 7(a) loan be used for?        

Proceeds from a 7(a) loan may be used for:

• Working capital
• Equipment purchases and or/ installation
• Acquiring, refinancing, or making improvements to Real estate
• New-building construction
• Renovation or expansion
• Starting a new business
• Purchasing an existing business
• Refinancing current business debt
• Purchasing furniture, fixtures and supplies
• Multiple purpose loans
• Changes of ownership

Loan proceeds may not be used to:

• Pay off an existing business loan
• Buy out a partner
• Pay delinquent state or federal withholding taxes
• Anything else that wouldn’t be considered a sound business purpose as determined by the SBA

Types of SBA 7(a) loans

The SBA has a suite of different financing products under its 7(a) distinction, and each one is meant to fill a different need in the small business ecosystem.

When considering your options, think about how large of a loan your business needs, your intended use of the funds, and how quickly you need the money.

SBA loans require a fair amount of information and paperwork, so researching 7(a) loan types will save you time later.

Standard 7(a) loan

The standard 7(a) loan is the most common and most popular type of 7(a) loan backed by the SBA. The purpose of these loans is to allow small businesses to expand by funding working capital or the purchase of equipment, supplies, and real estate. 

A standard 7(a) loan is available in amounts of $350,000 to $5 million. The maximum SBA guarantee is 85% for loans up to $150,000 and 75% for loans greater than $150,000. The SBA requires lenders to collateralize all standard 7(a) loans. 

For standard 7(a) loans, while it is the lender's responsibility to perform credit analysis, loan structure and verify that the applicant meets SBA eligibility requirements, the SBA makes the final approval decision before providing a loan number. 

7(a) small loan

The 7(a) small loan is similar in many ways to the standard 7(a) loans, but it’s meant for businesses that need smaller amounts of funding to get off the ground or expand. 

The maximum loan amount is $350,000. Their turnaround time and eligibility decision process are the same as standard 7(a) loans. The SBA guarantees 85% of loans up to $150,000 and 75% of loans over that amount. Collateral is not required for loans under $50,000. The lender follows its collateral policy for loans greater than $50,000.

Applicants can usually expect a decision in two to 10 business days.     

SBA Express loan

The SBA express loan is built for speed—sometimes, entrepreneurs need funding ASAP.

The maximum amount for an express loan is $500,000, and an application will be responded to in 36 hours or less. These loans are 50% guaranteed by the SBA. Only lenders with SBA Express authority can issue these loans, and the lender makes all eligibility, collateral, and credit decisions under delegated authority.

7(a) Export Trade Finance

The SBA has 3 core 7(a) international trade finance programs geared towards helping small businesses be competitive in export markets.

Export express loan

The export express loan was specifically created as a streamlined option for businesses in the export industry or those looking to develop an export operation. It has many similar features to an SBA Express loan, but provides a higher guarantee to mitigate international credit risk.

The loans, with a maximum amount of $500,000, have a breakneck turnaround time of just 24 hours or less. Similar to SBA Express, lLenders make all eligibility and collateral decisions through delegated authority. The SBA guarantee is 90% for loans of $350,000 or less and 75% for larger loans. This funding can take the form of a term loan, or a revolving line of credit that can last up to seven years.

Export working capital loan

Also tailored for exporters, the export working capital loan is meant to fund working capital for businesses that generate export sales.

These loans can range up to $5 million, and the SBA guarantee is 90%. Eligibility decisions are made by the SBA or lenders who have delegated EWCP authority. Unlike other 7(a) loans, there is no maximum interest limit imposed by the SBA for export working capital loans. The decision turnaround time is five to 10 business days. 

Collateral is required, usually in the form of export inventory and personal guarantees from a business’ owners. This loan can take the form of a term loan, or a revolving line of credit for three years or less.

International trade loan

International trade loans are SBA 7(a) loans aimed at businesses that want to grow their export side or need to modernize their operation to handle foreign competition.

The maximum loan amount is $5 million, and the eligibility decisions, turnaround time, and SBA guarantee are the same as for export working capital loans. For international trade loans, the loan maturity is set at 10 years for permanent working capital.

Equipment and machinery, loans mature up to 10 years or at the useful life of the equipment (not to surpass 15 years). Real estate loans mature at 25 years.    

7(a) CAPLines

CAPLines of credit are a form of a standard SBA 7(a) loan that works as a line of credit instead of a loan.

Remember, a business line of credit is a form of financing that allows businesses to access money as expenses arise, similar to a credit card. With a business loan, on the other hand, a full amount is disbursed upon approval, and repayments are made based on the approved amount.

The loan maximums, terms, and decision process of CAPLines of credit are the same as for standard 7(a) loans. The SBA offers four types of CAPLines:

Working Capital CAPLine

A line of credit for businesses that are unable to meet credit standards for other long-term financing, typically businesses that provide credit to other businesses, and in which repayment is based on assets.

To be eligible for a Working Capital CAPLine, your business must generate accounts receivable (not notes receivable), and/or have inventory.

Contract CAPLine

A line of credit aimed at financing businesses that work on a contract basis. Rather than permanent working capital, this specific type of working capital is meant to be used for working capital for one or more specific projects.

Builders CAPLine

A line of credit for small general contractors or builders that construct or renovate residential or commercial buildings. To be eligible for the Builders CAPline, you must be a construction contractor or a homebuilder with demonstrated experience in profitable construction or renovation.

Seasonal CAPLine

The Seasonal CAPLine is a line of credit meant for businesses that operate on a seasonal basis to help provide working capital for the busy season. To be eligible, your business must have been in operation for at least one year, and be able to demonstrate a pattern of seasonal activity. You can’t use this working capital to weather downturn or slow seasons, and must use it to finance increases in accounts receivable, inventory, and associated labor costs.

7(a) Working Capital Pilot (WCP) Program

Launched on August 1, the WCP pilot program offers monitored lines of credit to businesses through the SBA 7(a) loan program. 

Through the pilot program, eligible businesses can receive a line of credit up to $5 million. In order to qualify, businesses must operate in industries like manufacturing, wholesale, or professional services and have at least one year of operating history.

Businesses applying must be able to provide financial statements, accounts receivable, and accounts payable, as well as regular inventory reports.

The loan guarantee is the same as regular SBA (7a) loans.

Eligibility requirements for SBA 7(a) loans

Most U.S. small businesses can qualify for an SBA 7(a) loan, but there are a few exceptions such as nonprofits and certain restricted membership organizations. The SBA also requires that business owners meet basic criteria around location, profit status, size, citizenship and access to other financing.

For a full breakdown of eligibility rules - including disqualifiers, credit considerations, and ineligible businesses, read our guide to SBA loan eligibility requirements.

SBA 7(a) loan terms

SBA loans are meant to support long-term small business growth.

Loan maturity terms, as a result, are based on the ability to repay, the purpose of the loan, and the life of assets financed by the loan. Loan maturity refers to how long it takes for a borrower to repay the loan. At the end of your loan maturity term, you’ll make the final repayment. 

The maximum maturities for SBA 7(a) loans are as follows.

• The maximum maturity for real estate is 25 years.
• The maximum maturity for equipment is 10 years.
• The maximum maturity for working capital or inventory is 10 years.

SBA 7(a) loans used to buy fixed assets, like real estate or equipment, carry a maturity limited to the economic life of those assets, not to exceed 25 years. Fixed assets, which also include commercial property or furniture, are assets meant for long-term use that cannot be quickly converted to cash.

SBA 7(a) loan rates

With SBA 7(a) loans, the interest rate is set by the lender. In most cases, the lender will determine a rate based on creditworthiness, loan amount and repayment terms, and the applicant either accepts or rejects that rate. In many cases, you might be able to further negotiate the rate with your lender.

Current SBA loan interest rates are tied to the prime rate, which can be fixed or variable. As of August 5, 2025, the prime rate is 7.5%. The SBA allows lenders to add a markup, but caps how high the rate can go.

Want to see exact SBA rate ranges for the current month, caps, and how your rate is calculated?

See our guide to SBA Loan Interest Rates for current figures and the full breakdown.

SBA 7(a) fees                            

Along with interest rates, you should expect to pay a guarantee fee to the lender for SBA 7(a) loans. This fee will be based on the size of the loan and the type of 7(a) loan you apply for. Guarantee fees for 7(a) loans for fiscal year 2025 range between 2% and 3.5%. 

For a full table and breakdown of guarantee fees on 7(a) loans, read our guide to SBA guarantee fees.

Notably, the SBA expressly prohibits lenders from charging most other fees, including processing, origination, application, renewal, and brokerage fees.

Lenders are, however, allowed to charge a flat fee of $2,500 per loan.

Curious what you might pay on an SBA 7(a) loan? Use our SBA Loan Calculator to estimate your payments!

How to apply for an SBA 7(a) loan                     

While hundreds of different lenders offer 7(a) loans, the process is fairly standardized by the SBA.

The SBA 7(a) loan application process involves three main steps: choosing the right loan, gathering financial documents, and submitting your application to a qualified lender. Depending on the loan type, approval timelines can range from a few days to several weeks.

For a detailed checklist of required documents, step-by-step guidance, and tips to speed up the process, explore “How to Apply for an SBA Loan: Complete Steps and Requirements.”

Alternatives to SBA 7(a) loans

The requirements for SBA 7(a) Loans can be stringent. Maybe you feel it isn’t right for your business at this time! Here are some potential alternatives to SBA 7(a) loans to explore:

• SBA Microloans- These loans are smaller, and geared to newer businesses, but come with less strict borrower requirements.
• SBA Express Loan - These loans don’t require SBA review, which means you could work with a lender who can provide you funds you need quickly, with slightly less requirements than an SBA 7(a) loan.
• Lendio - While you can apply for an SBA loan with Lendio’s quick application, we can also connect you with online lenders to offer other flexible financing options that work for your business.

Ready to apply for an SBA 7(a) loan?

Apply for an SBA loan with Lendio’s quick application. We’ll connect you with the right lender for your situation, and can, on average, get you funded with a 7(a) small loan in less than 30 days.

Running a business means constantly juggling priorities, and cash flow is always at the center of the equation. Whether it’s making payroll, covering vendor invoices, or seizing a new growth opportunity, your ability to see what’s coming (and act quickly) makes all the difference.

That’s where QuickBooks comes in. With the suite of QuickBooks Money tools, business owners can accept payments, pay bills, and access capital all in one place. This gives small business owners a real-time view of money in and money out. You can track every transaction, automate key workflows, and spot cash flow trends before they become problems.

Tracking what matters: Money in, money out, and what’s next

Managing cash flow isn’t just about tracking dollars. At its core, it comes down to three components:

• Money coming in (revenue, payments received)
• Money going out (expenses, bills, payroll)
• Timing (when those inflows and outflows hit your accounts)

It’s not enough to know how much money you made last month. You need to know if your upcoming bills will outpace your receivables. That’s where many small businesses get stuck: juggling different systems, manual spreadsheets, and late payment surprises.

The QuickBooks Money portfolio simplifies this. It brings together tools to support processing money coming in, money going out, and funding opportunities to help you fill gaps and fund growth with flexible financing.

By centralizing the tools that drive cash in and cash out, QuickBooks gives you a living, breathing picture of your cash position and helps you automate cash flow forecasts, so you have financial clarity, and you can plan for what’s ahead.

QuickBooks Capital: Funding that fits your flow

Traditional business loans take time—often weeks—and demand piles of paperwork: income statements, balance sheets, cash flow projections, bank records, and more. And even after all of that, approval isn’t guaranteed.

• Apply directly through QuickBooks. No need to visit another portal and start from scratch with paperwork.
• Get a decision in as little as 30 seconds, instead of waiting 30 days.
• Access a Term Loan or Line of Credit, and get quick funding when you need it.
• Repay on predictable, fixed terms, with no origination fees.
• Receive funds in 1-2 business days², so you can move quickly and confidently.

Whether you’re bridging a short-term cash flow dip or making a bold move to grow, QuickBooks Capital enables you to make fast, confident decisions without slowing down your business.

Plan ahead with confidence

When your finances live in QuickBooks, you don’t just see where you’ve been. You can spot what’s coming. With built-in forecasting tools and real-time insights into cash flow, you can identify slowdowns before they impact your business, and act fast to stay ahead.

• Smooth over slow months without skipping a beat
• Purchase inventory ahead of demand, so you’re always stocked and ready
• Hire or scale at the right moment, not just when cash allows

Your financial data isn’t just for reporting, it’s a launchpad for your next move—whether that’s staying steady or stepping into something bigger.

The bottom line

Cash flow clarity is powerful—but when you combine that with fast, flexible capital access, your business has the tools it needs to succeed. With QuickBooks Capital, you can move quickly, invest wisely, and grow on your terms, without jumping through hoops.

SBA loans are one of the most popular ways for small business owners to secure affordable financing. Features like low interest rates and extended SBA loan repayment terms make funding more accessible, but they also create high demand, so competition for loan approval can be steep.

The loan application requires careful attention to detail. Accuracy is critical, and you’ll need to follow a clear set of steps. Otherwise, a single mistake could derail the process, costing you time and potentially leading to a loan denial.

Understanding exactly how to get an SBA loan approved and the top application mistakes to avoid could be the difference between securing the funds you need and starting over from scratch. Here’s what you need to know.

SBA loan applications require extra attention.

The SBA loan application process is more detailed than many expect. SBA financing has stricter requirements, leading to more paperwork and additional layers of review.

It’s important to note that the SBA does not issue loans directly. Instead, it partners with approved banks, credit unions, and online lenders that follow SBA guidelines for evaluating and processing applications.

The process typically starts with gathering financial documents, completing SBA-specific forms, and outlining a clear plan for how you’ll use the funds. Then, the lenders are required to verify every detail of your application and make sure your business is a solid credit risk. To pass this examination, it’s important to submit a complete, accurate, and well-documented application.

Common SBA loan application mistakes to avoid.

Even businesses with solid backgrounds and strong credit profiles can sometimes get tripped up during the SBA loan application process. Here’s a look at some of the most common mistakes business owners make, and how to avoid them.

Incomplete or disorganized documentation.

Lenders need a full picture of your business before they can approve your loan, so you’ll need to provide every requested piece of documentation. This includes:

• SBA Form 1919
• Recent tax returns
• Financial statements
• Your business plan
• A clear breakdown of how you’ll use the funds

Failing to provide these items can slow down your approval and could stop it altogether. Avoid this common mistake by creating a checklist and reviewing everything with a trusted advisor before hitting submit.

Underestimating the importance of credit.

When you’re applying for a business loan, your personal credit doesn’t matter—right? Actually, when you’re dealing with SBA loans, that’s not the case. Your personal credit history helps lenders evaluate risk, so that’s typically one of the first things they’ll look at. Make sure you’re prepared by reviewing your most recent credit report well ahead of time. This can help you identify errors or other issues that need to be addressed before you apply.

Overstating financial projections or revenue.

It’s tempting to present big growth numbers, especially when you’re excited about the direction your business is headed. But if your projections aren’t based on verifiable data or market trends, they can raise red flags. Lenders want to see realistic, well-supported forecasts, so be honest about your revenue. Back up your projections by explaining your assumptions and showing that while your goals are ambitious, they’re also grounded in reality.

Lack of clear loan purpose.

SBA lenders want to know exactly where the money is going and how it will help your business grow or stabilize, so vague or inconsistent explanations for how you’ll use the funds could raise more red flags.

The more specific your answers, the better. Whether you’re planning to use the funds for payroll, equipment, or working capital, make sure you can show that each dollar is tied to a clear business goal. This shows that you’ve given it plenty of thought and will use the money to make smart business moves.

Ignoring debt-to-income or debt-service coverage ratios.

Make sure you’re realistic about how much debt your business can afford to repay. Before approving a loan, SBA lenders look closely at your debt-to-income (DTI) and debt-service coverage ratio (DSCR). These calculations help assess your ability to handle an additional loan. If the numbers don’t make sense, they may deny your application, even if everything else checks out.

Before submitting your SBA loan application, carefully run the numbers and make sure the amount you’re requesting aligns with what your business can reasonably support.

Not understanding the SBA loan type you’re applying for.

Applying for the wrong type of SBA loan can delay your application or lead to a mismatch in funding. For example, an SBA 7(a) loan may work well for general business needs, while a 504 loan is better suited for purchasing real estate or equipment. And if your business is fairly new and you meet the requirements, you may benefit from applying for an SBA Microloan instead.  

To avoid this mistake, take the time to research your options or meet with a loan advisor who can help you choose the program that best fits your business goals.

Skipping the business plan (or submitting a weak one).

A strong business plan shows lenders where your business is headed and how you’ll get there. Generic, outdated, or incomplete plans can lead lenders to believe you haven’t fully thought through your strategy or aren’t committed to the long-term success of your business.

Creating a robust business plan is well worth the time and effort it requires. Make sure your plan includes your current financials, clear growth strategies, and a thorough competitive analysis. Demonstrating that your business plan aligns with the loan request helps lenders see that you’re thinking strategically and ready to use the funds with purpose.

Strengthen your SBA loan application.

Once you’ve sidestepped the most common SBA application mistakes, there are a few additional things you can do to make sure your submission is as strong and lender-ready as possible. Taking these steps can help speed up the process and may boost your chances of approval:

• Stay organized: Keep all of your paperwork in a digital folder so it’s easy to access and update
• Work with a professional: An accountant or small business advisor may help spot missteps before you submit
• Be transparent: Most challenges will come up during the review process anyway, so it’s better to be upfront. Let lenders know what you’ve overcome and how your business is stronger because of it
• Double check everything: Review the SBA’s official borrower checklist and lender guidelines before submitting your application

A complete, well-prepared application shows lenders you’re serious, and may make it easier for them to say yes.

Use the SBA application process to strengthen your business.

SBA loan application mistakes are fairly common. Even experienced business owners can miss a step, but with the right preparation, most errors are avoidable.

The application process is about more than completing paperwork. It’s an opportunity to polish your business plan, get a clear picture of your financials, and build confidence in exactly what you’ll do with the funds. Not only will this level of clarity help improve your chances of approval, but it can also help you run a more successful business.

Take the next step toward reaching your business goals. Explore SBA loan options with Lendio and check your eligibility today.  

The words “flexible” and “financing” don’t seem like they should be in a sentence together. When you think of financing, you may think of a stuffy banker stamping rejections on loan applications. Maybe you think about how your business is stalled in growth because you’ve reached the end of your credit line. It is not often that you think about financing options that are flexible to your needs. They do exist, however. Here are some flexible financing options for your small business.

Does your financing plan account for unexpected losses?

As we have all seen, life is unpredictable. Your business could be performing well, but then revenue may drop off a cliff for outside reasons. Here is where that flexibility will come in handy. The COVID-19 pandemic was terrible for small businesses, and it also shed light on some huge holes in small business finances. Many small business owners turn to personal funds to keep their businesses afloat because they lack cash reserves. If anything, the pandemic taught small business owners the importance of access to flexible financing and being prepared for unforeseen challenges.

Flexible financing options.

Many business owners found they were at risk of breaching their banking covenants with the sudden revenue loss. Some business owners were struggling to meet payroll. Others had to close altogether. To keep the lights on for your business, you either need a large cash reserve or flexibility in your financing. If you have maxed out a bank line of credit, do you have access to working capital from somewhere else? Is your bank willing to extend your credit limit?

Equipment financing

It is worth considering some supplemental financing options to round out your financing plan. Equipment financing is a great option that can unlock working capital to support your business growth. Equipment financing is a loan that you can use for specific reasons, like buying manufacturing gear or any other equipment you need for your business. If you are looking to upgrade your cybersecurity and tools because you have moved mostly remote, equipment financing can cover those costs. This type of financing will be a loan that probably has strict repayment terms, but you can use the money pretty flexibly for your business’s needs. 

Accounts receivable financing.

Accounts receivable financing can help you meet payroll while waiting to collect on your receivables. In simpler terms, the amount of capital you can access is based on the amount of capital you are waiting to collect from your customers. With accounts receivable financing, you can add to your team without the stress of adding to your overhead. Since it’s based on your outstanding invoices, it does not require a high credit score or lengthy time in business, which makes the approval requirements very flexible. This type of financing is similar to a line of credit, but the limit will not be as rigid. Typically, the higher your accounts receivable, the more capital you can access.

Line of credit.

A line of credit gives you some flexibility in drawing capital and repaying it. You don’t have to use all the money, and you only pay interest on the amount you use. Online lenders and traditional banks offer lines of credit, and it’s a great tool to have available if you want a more flexible financing plan.

Revenue-based financing

Revenue-based financing—also called a business cash advance— is basically a lump sum of cash that is repaid through daily or weekly withdrawals based on your future earnings. These are typically costly because the interest rates are high. Make sure you read your contract carefully before taking out a cash advance.

Which Flexible Funding Option Is Right for You?

Most of these financing options can work together to round out your financial plan. For example, you can use accounts receivable financing to cover your payroll and also take out an equipment loan to cover your production tools. You could use a cash advance alongside a line of credit. It is crucial to consider your business and your industry when signing up with a new lender. It’s best to choose a lender that knows your industry and can offer solutions to your unique financing challenges. Ultimately, your financing plan should include some flexibility to account for sudden gains or sudden losses.

Presented by QuickBooks Capital 

This article is presented in partnership with QuickBooks Capital, helping small businesses access flexible financing when it’s needed most.

‍

Every business has its version of a rainy day. An unexpected expense, a delayed customer payment, or a slow sales month that throws you off your rhythm.

These moments don’t always spell disaster, but they can create serious cash flow strain—especially if you’re unprepared. That’s why building a business safety net is one of the smartest financial moves you can make.

Whether it’s a small emergency fund, access to flexible capital, or a combination of both, having backup resources on hand can help you weather the storm and keep your business moving forward.

1. Build a basic emergency fund.

Your first layer of protection is straightforward: an emergency savings account dedicated to your business.

Many business owners skip this step because their margins are thin. But that’s exactly why it matters. By treating savings like a recurring expense—just like rent or payroll—you can gradually build a cushion that helps you stay afloat when things don’t go as planned.

A good rule of thumb? Aim to set aside three to six months’ worth of operating expenses. That might sound ambitious, but you don’t need to get there overnight. Start small and build consistently.

Your emergency fund can cover:

• Unexpected equipment repairs
• Delays in customer payments
• Temporary dips in sales
• Even growth opportunities—like a chance to buy discounted inventory or expand your space

If you’re using QuickBooks Online, you can monitor income, expenses, and trends to help determine how much to save each month. Then, you can set a recurring transfer to automate your contributions.

2. Secure a business line of credit

Think of a business line of credit as your second layer of defense—funding that’s there when you need it, and invisible when you don’t.

Unlike a traditional term loan, a line of credit (LOC) gives you access to a set amount of capital that you can draw from at any time, and you only pay interest on what you use.

It’s ideal for:

• Covering delayed receivables
• Managing unexpected costs like repairs or supply chain delays
• Taking advantage of time-sensitive growth opportunities

3. Have a plan for when you don’t have a cushion.

Not every business has the luxury of a fully stocked emergency fund or a pre-approved line of credit. That doesn’t mean you’re out of options—it just means you need a plan.

If an unexpected expense hits and you don’t have cash on hand, here’s what to do:

• Assess the urgency: Is it something that needs to be handled today, or can it wait 30 days while you adjust?
• Revisit your cash flow forecast: Look for slow-paying invoices, unnecessary spending, or opportunities to shift resources.

Explore financing options: You may still qualify for a line of credit or a term loan based on your business performance—even if you haven’t saved up.

Having a plan—even if it includes financing—is better than being caught off guard. Smart business owners know that preparation doesn’t mean perfection. It means thinking ahead.

Be prepared, not panicked.

Rainy days in business are inevitable—but stress doesn’t have to be.

By building a financial safety net with three simple layers—emergency savings, access to flexible credit, and a clear plan for when funds run low—you give your business the resilience to face challenges and pursue opportunities without hesitation.

Whether you’re just getting started or ready to strengthen your current financial strategy, the best time to prepare is now.