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SBA loans are crucial financial tools that come with distinct terms and lengths to meet various small business needs. Typically, these loans have more flexible duration options than traditional financing, ranging from short to long-term. This flexibility allows business owners to secure funding and meet the operational and expansion needs of their businesses, without damaging their long-term financial health. 

Each SBA loan program has maximum loan maturities depending on the use of the proceeds, with flexibility for the maturity based on the borrower’s ability to repay. We’ll go over typical loan lengths below, as well as long-term vs. short-term options. We’ll also cover term details for each SBA loan program and their maximum maturity limits.

What is SBA loan maturity?

Like other loans, loan maturity refers to the date when your SBA loan term ends, and the principal balance plus any outstanding interest is due. In other words, it’s the final payment deadline for your loan.

Understanding SBA Loan lengths

SBA loans are designed with a range of maturities to accommodate diverse business needs and objectives. The typical loan duration depends on the type of SBA program. 

These variable timelines allow business owners to choose a loan structure that best aligns with their capacity to repay and their strategic growth plans. Many SBA loan programs have loan terms of 10-25 years, while others are designed with shorter terms of 36 months to 5 years.

It’s important to note that simply because there is a maximum, it doesn’t mean you will get the longest term possible on your SBA loan. Lenders must state a maturity on the loan, which is the shortest appropriate term based on the use of proceeds, and your ability to repay. Although lenders determine the loan maturity, the loan length must comply with SBA rules around the specific loan program and use of funds.

Types of SBA loans and their lengths

There are three main SBA loan programs: the SBA 7(a) loan program, the SBA 504 loan program, and SBA microloans. Under each of these umbrellas, there are many different types of SBA loans, each with its own limits and rules around term length.

SBA 7(a) Loan terms

The SBA 7(a) loan program encompasses several types of loans, from the Standard 7(a) to CAPlines. Below, each loan type is broken out with term lengths.

SBA Standard 7(a) and 7(a) Small loan length

Standard 7(a) loans, and 7(a) Small loans have the same maturity rules around use of proceeds. In the chart below, you can see the maximum loan term length for both loans, based on what the loan proceeds are used for.

If standard 7(a) loans or 7(a) small loans are used for mixed purposes, i.e. land and building, working capital, and/or machinery and equipment, or refinancing any of these, the maturity can be a blended maturity. This means the lender can combine the maturities for each of the different uses to create a weighted average, or reasonable blended maturity.

However, if 51% or more of a mixed-use loan is used for real estate, the entire loan can have a maturity of 25 years.

Blended maturity also applies to all types of ownership changes, depending on what the business purchase entails.

SBA Express loan length

SBA Express loans, when structured as a term loan, have the same maturity rules as Standard 7(a) loans. 

However, if an SBA Express loan is structured as a line of credit, either revolving or non-revolving, the maturity limit is 10 years.

If the line of credit is revolving, you can draw, repay, and re-borrow funds during the revolving period, which is 5 years maximum. After that, any outstanding balance is termed out to a non-revolving loan that must be repaid fully within 10 years.

If the line of credit is non-revolving, you can draw funds up to the limit, but can’t re-borrow the funds. The line of credit must be fully repaid within the 10-year limit.

SBA CAPLines and their loan lengths

CAPLines have set maturity for each type, but also come with rules to keep in mind when it comes to time needed to pay back the loan.

Seasonal CAPLines have a mandatory “clean-up” period each season. This means a 30-day period where the borrower must bring their balance to $0. This shows the business isn’t dependent on borrowed funds year-round—just during seasonal peaks. This is required for Seasonal CAPLines, but is optional for other types.

CAPLines also require an exit strategy. The final receipt of funds from the CAPLine must occur far enough in advance of the maturity date, so that any assets acquired with the loan can be converted back into cash to make the final payment on the loan by the maturity.

Export Express loan lengths

SBA Export Express loans have different lengths depending on the structure of the loan.

If the Export Express loan is structured as a line of credit, or a revolving loan, the maximum maturity is 7 years.

If the Export Express loan is structured as a term loan, it carries the same maturity rules as a Standard 7(a) loan.

Export Working Capital Program loan lengths

EWCP loans have a maximum loan term of 36 months, although loan terms are typically much shorter depending on the loan structure.

If the EWCP loan is a single transaction-specific loan, the term may be up to 36 months, but the lender will have to justify any maturity over 12 months with documentation to the SBA.

If a transaction-based line of credit is used, this EWCP loan typically doesn’t exceed 12 months, but can be approved up to 36 months with annual renewals.

Asset-Based (ABL) EWCP loans are typically issued for 12 months, and then renewed annually up to 36 months. 

For both Transaction-Based Line of Credit and ABL loans, each renewal is treated as a new loan, and is subject to new SBA guarantee fees.

International Trade Finance loan lengths

Similar to Standard 7(a) loans, International Trade Finance (ITF) loans follow the same maturity limits based on use of the proceeds.

SBA 504 Loan terms

The SBA 504 loan program offers long-term, fixed-rate financing for major assets like real estate and equipment. Loan lengths are determined by the type of asset financed by the loan, with terms designed to match the useful life of the project. 10, 20, and 25-year debenture options are available.

Here are the maximum loan term lengths for 504 loans, depending on the project:

Third-party loans (a required loan from a private lender that is paired with the SBA portion) are required to have terms of at least 7 years for 10-year maturity loans, and 10 years for 20 to 25-year maturity loans. If multiple third-party loans are used, a weighted average maturity must be calculated.

SBA Microloan loan terms

When it comes to loan length for SBA microloans, things are a little simpler. Any SBA microloan issued has a maturity of 10 years from the note date.

Key Takeaways: What influences SBA loan length?

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Ultimately, SBA loan terms are designed to match the asset’s expected economic life, and your ability to repay within the term limits., ensuring these small business loans are structured for both stability and sustainability.

SBA loans  are a popular financing option for small businesses, offering affordable interest rates and flexible terms for entrepreneurs looking to start or expand their business. 

However, like any loan, there are limits on how much money you can borrow through the SBA program. Let's dive into the details of maximum SBA loan amounts and what they mean for small business owners.

Understanding maximum SBA loan amounts.

The maximum SBA loan amount refers to the highest sum a borrower can receive through a specific SBA loan program. These limits are in place to ensure that the loans are used for their intended purpose—to help small businesses grow and succeed.

The SBA sets different maximum loan amounts for its loan programs, including the 7(a), 504, and microloan programs. Each of these programs is designed to meet unique funding needs of small businesses, and limits will vary based on each loan program's requirements. , which we'll explore in more detail below.

Why are loan limits important?

While it would be great to receive limitless financing when you apply for a loan, loan limits help small businesses achieve a balance between being underfinanced, so they can’t grow and expand their business, and over-financed with debts that exceed their ability to pay.

Loan limits, especially those set by the U.S. Small Business Administration, help you make informed decisions and maximize financing without harming your business in the long run.

Now that you understand more about what SBA loan limits are, let's take a look at the unique loan limits for each SBA loan program.

Maximum SBA (7a) loan amounts.

The most popular SBA loan program is the 7(a) loan program, which provides working capital for small businesses. Each loan type under the SBA 7(a) loan program umbrella has different maximum amounts. They are listed in the chart below, along with the maximum amount of the loan the SBA guarantees.

Small Business Administration (SBA) loans are a popular financing option for small businesses. These loans offer affordable interest rates and flexible terms, making them an attractive choice for entrepreneurs looking to start or expand their business. However, like any loan, there are limits on how much money you can borrow through the SBA program. 

Let's dive into the details of maximum SBA loan amounts and what they mean for small business owners.

Maximum SBA 504 loan amount.

The SBA 504 loan program is specifically designed to support small businesses in acquiring major fixed assets, such as real estate or equipment. Because the 504 loan is structured differently than 7(a) loan programs, the limit for the loan amount is not intended to cover all project costs.

With 504 loans, there are three parties to the loan structure. Usually:

• 50% bank/lender financing
• 40% CDC/ SBA-backed debenture
• 10% borrower contribution (this could be more depending on the project and some business characteristics).

With that in mind, here are the maximum loan limits the SBA will provide for 504 loans.

The minimum loan amount for a 504 loan is $25,000.

Maximum SBA microloan amount.

The SBA offers a microloan program designed specifically to aid small businesses and non-profit childcare centers in need of small-scale financing. This program caters to businesses that require smaller amounts of funding than offered under the larger SBA loan programs.

Microloans are distributed to borrowers through intermediary lenders, and the SBA microloan loan limit is $50,000. The average loan awarded tends to be around $13,000.

SBA Loan Limits by use case

If you’re interested in applying for an SBA loan for specific purposes, like buying a business or improving a commercial property, this chart can help you figure out which loan program you would use, and the applicable maximum SBA loan amount.

Keep in mind that most businesses will not qualify for a loan of the maximum amount, and you must meet SBA eligibility requirements for each of these uses of proceeds to qualify.

Business loan credit score requirements vary based on many factors. Different lenders (even non-traditional lenders) might look at the same  business loan requirementsand weigh their importance differently. 

Before you go into the bank, you’ll want to know where you stand with these four very important metrics:

1. Your credit score—both your personal and business score (yes, there is more than one)
2. Years in business—most banks want to see two or more
3. Your annual revenues—more is better than less
4. Your collateral—there are different types of collateral, depending upon the type of loan you’re looking for

Credit score is number one for a myriad of reasons. It’s the most important metric and is the cause of most rejections. Although there is hope for business owners with less-than-stellar credit, those options come with a cost. Minimum credit score requirements vary by loan type and lender, but you'll have the most options available to you with a minimum credit score of 650.

Minimum credit score by loan type.

Here are the minimum personal credit score requirements for each type of business financing to get an idea of the options available to you.

Minimum credit score by lender type.

Here are the minimum personal credit score requirements for each type of business financing to get an idea of the options available to you.

Why does credit score matter?

Credit scores play an influential role in securing a business loan. This three-digit number quantifies your fiscal responsibility and reliability, providing lenders with a quick, objective assessment of your credit risk. 

In essence, a good credit score signals to lenders that you've consistently fulfilled your financial obligations to other lenders on time and are likely to repay their loans promptly. Consequently, businesses with higher credit scores are often offered more favorable loan terms, including lower interest rates and longer repayment periods. 

Conversely, a bad credit score could denote a higher risk proposition for the lender, potentially leading to a rejected application or a higher interest rate and stringent loan conditions.

About personal credit scores.

One of the most commonly used personal credit scores is the FICO Score, developed by the Fair Isaac Corporation. The FICO Score is calculated based on five main components, each weighted differently:

1. Payment history (35%) - This represents whether you've paid past credit accounts on time.
2. Amounts owed (30%) - This includes the total amount of credit and loans you're utilizing compared to your total credit limit, also known as your credit utilization ratio.
3. Length of credit history (15%) - This considers the age of your oldest credit account, the age of your newest credit account, and an average of all your accounts.
4. New credit (10%) - This comprises the number of new accounts you've opened or applied for recently, including credit inquiries.
5. Credit mix (10%) - This takes into account the diversity of your credit portfolio, including credit cards, retail accounts, installment loans, mortgage loans, and others.

FICO credit scores range from 300 to 850. Here's a general classification of FICO scores:

Bad credit: 300-579

Within a credit score of 300-579, you'll struggle to qualify for business financing. Once your score gets above 500, you may qualify for a cash advance, equipment financing, or invoice factoring depending on the lender and whether you meet other requirements.

Fair credit: 580-669

With a fair credit score of 580-669, you'll meet most minimum credit score requirements for a cash advance, invoice factoring, or equipment financing. If your score is 600 or above, you're more likely to qualify for a line of credit or term loan.

Good credit: 670-739

Within this credit range, you'll likely meet all lender's minimum credit requirements for term, SBA, commercial real estate, and bank loans.

Very good credit: 740-799

Exceptional credit: 800-850

About business credit scores.

A business credit score, much like a personal credit score, is a numerical representation of a business' creditworthiness. It provides a quick, objective snapshot of the financial health of a business and its ability to repay debts on time. The score is generated by credit bureaus such as Dun & Bradstreet, Equifax, and Experian, and ranges typically from 0 to 100.

The calculation of a business credit score considers several factors, including:

1. Payment history - As with personal credit, timely repayment of debts is crucial. Regular, on-time payments to creditors enhance your business credit score.
2. Credit utilization ratio - This measures how much of your available credit your business is currently using. A lower ratio (meaning you're using less of your available credit) can positively impact your score.
3. Length of credit history - Longer credit histories can benefit your business credit score, as they provide more data about your business' long-term financial behavior.
4. Public records - Bankruptcies, liens, and judgments can negatively affect your business credit score.
5. Company size and industry risk - Larger companies and those in industries considered less risky may have higher credit scores.

Lenders will typically review both your personal credit score and business credit score when qualifying you for a business loan.

How to increase your credit score.

If your credit score isn’t where you’d like it to be, there are several steps you can take to boost your score.

Monitor your credit reports.

Equifax, Experian, and TransUnion are where you’ll want to go to see your current credit reports. Make sure the information is correct and that your credit report reflects reality. Make sure that the report is accurate and that accounts that aren’t yours aren’t reported. Bankruptcies that are over 10 years old or the associated accounts shouldn’t be reflected on the report. Other negative information older than seven years should also not be included in the report. 

Get a major credit card.

Getting a credit card and using it wisely is one way to boost your credit. Be sure to make your payments on time.

Arrange automatic payments on every card or loan.

It’s easy to forget to make a payment when it’s due or let travel or a busy schedule distract you. However, credit scores are very sensitive to whether or not you make payments on time, so do all you can to keep your payments regular and on time.

Don’t let disputes go to collections.

If you have a dispute with a vendor and you allow it to escalate to collections, it doesn’t look good on your report. Rather than taking this path, it’s better to pay under protest and go to small claims court. Don’t get sued, though, as lawsuits and judgments are also major dings to your credit.

Consolidate your debt if you can’t pay it off quickly.

The scoring criteria treat installment loan balances kinder than the same balances on a credit card. But be wise with your credit card balances and avoid running them up.

Take debt off your credit report entirely.

This is a tough one, but family, friends, or dipping into your retirement plan is sometimes a good way to get credit off your report entirely. Be careful about dipping into your 401k. If you borrow from a 401k and repay it there are no tax consequences, but if you withdraw money, there will be tax consequences.

Don’t close accounts or let them be closed.

It might not help your scores and could hurt them. If you’ve got a card you haven’t used for a while, take it out to dinner or buy a tank of gas, just make sure they’re included with your other automatic payments.

Don’t apply for credit you don’t need.

At about five points an application, if you have sketchy credit, it can add up.

Depending on how bad your score looks today, you might need to invest some time—but there is hope. Just remember, your credit score is the first thing any lender will look at before they offer you a small business loan. 

Ready to compare business loan options? Apply for a small business loan.

Navigating the world of small business loans can be complex, and changes in policies or procedures by the U.S. Small Business Administration (SBA) add a new layer of challenge. However, staying informed about SBA updates isn’t optional - it’s essential for business owners who want to capitalize on growth opportunities or secure working capital in today’s environment.

In early 2025, the SBA released new guidance that goes into effect on June 1, 2025. These changes impact eligibility criteria, loan classifications, and documentation expectations across SBA 7(a) and 504 programs. If your business is considering a government-backed loan - or already relying on one - this guide breaks down what’s new, what it means, and how to prepare.

Why this matters now

The SBA SOP 50 10 8 (Lender and Development Company Loan Programs) is 448 pages long - not exactly light reading for a busy business owner. But within it are critical shifts that could impact your funding journey.

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SBA loans offer some of the most favorable terms on the market, supporting everything from working capital to equipment, disaster recovery, and growth. Missing these changes could mean: 

• Being disqualified from overlooked criteria
• Delays in the loan process due to missing documentation
• Leaving money on the table while competitors secure better funding

Key 2025 SBA Updates Every Business Should Know

The latest SBA Standard Operating Procedure (SOP 50 10 8), replaces SOP 50 10 7.1 and brings substantial changes across the board. Here’s what small business owners need to know:

Citizenship requirements just got stricter

To qualify, 100% of owners, guarantors, and key employees must now be U.S. citizens, nationals, or lawful permanent residents (green card holders). This replaces the previous 51% threshold and disqualifies any company with foreign stakeholders, even indirectly.

With the new rule, all direct and/or indirect owners or SBA guarantors must be U.S. citizens, U.S. nationals, or lawful permanent residents. SBA lenders must certify that no owners or guarantors are ineligible persons in E-Tran.

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The new rule also defines an ineligible person:

• Foreign nationals
• Those granted asylum
• Refugees
• Visa holders
• Nonimmigrant aliens
• Deferred Action for Childhood Arrivals (DACA) recipients
• Undocumented aliens in the U.S. illegally

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Finally, the SBA has introduced a six-month lookback requirement. Applicant businesses are ineligible if any associate of the business was an ineligible person in the six months before the SBA loan number was issued unless they have completely divested their ownership interest and severed all relationship with the applicant and company for the life of the loan.

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More industries are now ineligible

SOP 50 10 8 introduces a dedicated section for types of ineligible businesses in the update, with criteria for determining eligibility by business type. Businesses involved in marijuana, hemp, and cannabidiol (CBD) operations are now officially excluded again, reinstating pre-2023 policies. 

Higher SBSS score minimum for 7(a) small loans

Previously, the minimum acceptable SBSS score to be eligible for a 7(a) small loan was 155. The SBA has updated the minimum to a 165 score as of June 1, 2025.

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There’s another change worth noting. Regardless of the SBSS score obtained, a business is ineligible if it has an existing 7(a) or 504 loan that is not current (required payment not made in more than 29 days).

Stricter “Credit Elsewhere” documentation

Demonstrating that credit is not available elsewhere on reasonable terms from non-federal, non-state, or non-local sources has been a longtime requirement for eligibility. This hasn’t changed; however, where lenders had to give a broad certification and substantiation that credit wasn’t available elsewhere, they now have to give specific reasons why the applicant doesn’t meet conventional loan policy, with supporting documentation.

Lenders also can’t certify based on the applicant's credit score alone, which means a more thorough analysis of why a small business won’t meet standard loan policy requirements beyond a poor credit score. 

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As part of this, an applicant's personal liquidity, not just business liquidity will be assessed, and if an applicant has significant personal cash or assets they may be disqualified, even if the business would otherwise qualify on paper.

Lenders are now responsible for verification

While not a direct requirement, it’s worth noting that lenders are now accountable for verifying applicant eligibility. Before the rule change, the SBA took responsibility for verifying applicant eligibility requirements. Now, specific processes and frameworks have been developed for lenders to take on the burden of reviewing and documenting eligibility for an SBA loan directly, except for certain determinations that will be handled by the SBA.

Changes to SBA 7(a) loan categories

Another notable rule update is to 7(a) loan categories themselves, decreasing the upper limit for 7(a) small loans, and the lower limit for 7(a) standard loans.

SBA Franchise Directory reinstated

SOP 50 10 8 has reinstated the SBA Franchise Directory, creating a catalog of preapproved businesses for easier decision-making by lenders. As a positive, this helps franchise owners benefit from a streamlined certification process. However, if a franchise is not listed in the directory, or hasn’t submitted the required documentation to verify eligibility and receive new certification by July 31, 2025, they will be removed. 

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If a franchise is not in the directory, applicants will need to apply to get added to it before the SBA loan file can move forward.

Revenue-based financing and factoring debt can’t be refinanced

Previously, merchant cash advances (revenue-based financing) and factoring weren’t explicitly listed as being ineligible for refinancing. However, the SBA now defines merchant cash advances as “a purchase of future receivables”, not a traditional loan, so as of the effective date, these loans can’t be refinanced with SBA funds.

How SBA Rule Changes Affect Small Business Owners

The 2025 changes bring both new challenges and new responsibilities. For many small business owners, this means it’s time to:

Reassess your ownership structure

The SBA’s eligible person requirements are stricter than ever, and many small businesses that were eligible prior no longer are. You’ll need to carefully assess your current ownership structure and determine if your business meets ownership eligibility requirements.

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If it doesn’t, you can consider the path of changing your ownership structure, or explore your funding options through alternate sources beyond the SBA.

Strengthen your documentation

There's an increased need for strong documentation in multiple areas of the application process, from person eligibility to demonstrating why conventional credit isn’t available. Review your business's current documentation practices and make improvements in advance to reduce stress and errors in the updated SBA application process.

Confirm industry eligibility 

Not only do the 2025 SBA rule changes bar certain businesses from eligibility, but it also provides expanded context and examples of types of businesses that are ineligible or exceptions to each rule. Familiarize yourself with the SBA SOP 50 10 8 Section A, Chapter 1 to determine whether your business is eligible based on industry.

Know Your SBSS score

As the SBSS minimum score has increased, many businesses that were previously eligible for smaller SBA 7(a) loans may find themselves battling stricter credit requirements. Take steps to improve your score proactively to avoid being shut out of SBA eligibility.

Where Lendio can help

At Lendio, we’ve helped small businesses secure more than $535 million in SBA funding. We work with a trusted network of SBA lenders to help you:

• Understand your eligibility
• Compare loan options across lenders
• Navigate updated documentation requirements
• Explore alternatives if you’re no longer SBA-eligible

We know these rule changes are complex—but you don’t have to face them alone.

Final word: Stay ready, stay funded

The SBA’s 2025 updates reflect a shift in how government-backed capital is distributed—and who qualifies. While some of the changes may feel like roadblocks, they can also be navigated with the right information and support.

Whether you’re applying for your first SBA loan or reevaluating your funding strategy, now is the time to prepare. Review your structure, improve your documentation, and talk to a trusted partner.

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One key aspect that small business owners encounter when applying for Small Business Administration (SBA) loans is the SBA guarantee fee. This fee is a critical component of the loan process, yet it can cause confusion and questions among entrepreneurs. In this guide, we'll explain everything you need to know about it, including its associated costs, how it's calculated, and implications for your loan.

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New to SBA loans? Start with our overview of SBA loan options to explore types, terms, and how they work.

What is the SBA guarantee fee?

Because SBA loans are guaranteed up to 50-90% by the Small Business Administration, lenders pay guarantee (or guaranty) fees for some types of financing they issue under the program. These fees help cover the SBA’s costs in the event that a borrower defaults on a loan.

Although the guarantee fee is charged to the lender, the SBA allows lenders to pass the fee onto the borrower. Most lenders will typically do this.

Which SBA loans have guarantee fees?

Not every type of SBA loan will have a guarantee fee assessed. You can expect them for 7(a) and 504 loans, but not for SBA microloans. It’s also important to note that the guarantee fee is assessed only on the portion of the loan guaranteed by the SBA - not the total approved loan amount.

SBA guarantee fee costs (by program)

SBA guarantee fees are based on the guaranteed amount on your SBA, the type of SBA loan, and your repayment term.

SBA 7(a) loan guarantee fees

Guarantee fees for SBA 7(a) loans change each fiscal year. Usually, the SBA will publish updates to lender fees for the coming fiscal year in advance. However, in March 2025, the SBA published an update to lender fees in effect for the remainder of the fiscal year, which means 7(a) loans issued prior to March 27, 2025, and 7(a) loans issued after March 27, 2025 have different fees associated. 

Both are included in the tables below.

Guarantee fees for 7(a) loans issued after March 27, 2025

Guarantee fees for 7(a) loans issued before March 27, 2025

*The SBA guarantees a maximum of $3.75 million on 7(a) loans.

SBA Express loan guarantee fees for veterans

For SBA express loans made to businesses owned and controlled by a veteran or the spouse of a veteran, the guarantee fee is $0.

Export Working Capital Loans guarantee fees

Export Working Capital Program loans, another type of 7(a) loan, also have their own guarantee fee structure depending on the maturity term of the loan.

SBA 504 loan guarantee fees

Similar to the 7(a) program, the SBA publishes guarantee fees for the 504 loan program to remain in effect for the coming fiscal year.

Since the 504 program has a two-part funding structure, consisting of a portion of funding from the borrower, from a Certified Development Company (CDC), and a third-party lender, the SBA guarantee fee applies only to the CDC portion of the loan.

For the 2025 fiscal year, there is no guarantee fee on SBA 504 loans. However, the lender can charge the SBA’s annual service fee to the borrower for these loans, which is currently 0.331% for the 2025 fiscal year.

How are SBA guarantee fees calculated?

Calculating the SBA guarantee fee can seem complex, but once you understand the calculations behind it, it's much more manageable. Here is a simplified process:

1. Identify the guaranteed portion: Determine the amount of the loan that the SBA guarantees. This typically ranges between 50%-90% of the entire loan, depending on the specific SBA loan program.
2. Apply the fee structure: Using the fee rates provided by the SBA, which vary depending on the size and term of the loan, calculate the fee charged on the guaranteed portion.
3. Total loan cost: Add up the fee amount and any additional associated loan costs to understand the total cost of the loan.

Remember, the fee is based on the guaranteed portion of the loan, not the total loan amount, which means that the actual amount paid can be less than the full percentage of the entire loan.

Reach out to your SBA lender for assistance if you are having difficulties calculating potential guarantee fees. You can also check out the SBA’s online calculator to determine your guarantee fees.

Additional SBA 7(a) loan fees

Beyond the guarantee fee, small business owners should be aware of other potential charges associated with an SBA 7(a) loan. Here's a breakdown of other fees that the SBA allows lenders to collect from borrowers:

Packaging fees

Lenders can charge borrowers service and packaging fees for the SBA loan. This can take a few forms and structures, so it's important to understand what they are. These fees are for things like:

• Completing an application
• Completing documents related to an application, like business plans or cash flow projections
• Software or tech used to prepare documents

Here’s how packaging fees can be structured:

Flat fee:

The SBA allows lenders to charge a flat fee of up to $2,500 per loan without documenting services performed. Flat fees of above $2,500 require the lender to provide itemization and documentation to the SBA.

Hourly rate:

For packaging fees charged on an hourly rate, the fees must be reasonable and customary for the services performed. It must also be consistent with fees the lender charges on an hourly rate for similarly-sized non-SBA loans.

Percentage of loan amount:

For packaging fees structured as a percentage of the loan amount, the fee can’t exceed either: what the lender charges on a percentage basis for similar-sized non-SBA loans, or the following (whichever is less):

• For loans $150,000 or less: 5% of the loan amount
• For loans $150,001 or more: 3% of the loan amount

If the packaging fee is structured as a percentage of the loan amount, it cannot be more than $30,000.

Extraordinary Servicing fees

Extraordinary servicing fees are charged when your loan requires intensive, out-of-the-ordinary servicing. Examples of this could be: loan workouts, special monitoring, or complex restructures.

The fee must be reasonable and justified based on the services performed, and is subject to SBA approval. The fee can’t exceed 2% of the portion of the loan requiring the extraordinary servicing on most 7(a) loans, with the exception of EWCP loans and CAPlines.

Extraordinary Servicing fee limits for EWCP and CAPLine

Lenders can charge extraordinary servicing fees more that 2% on EWCP and Working Capital CAPlines that are disbursed on a Borrowing Based Certificate. However, these fees must be reasonable based on the extraordinary effort required, and can’t be higher than fees charged on a lender’s similarly-sized, non-SBA commercial loans.

Out-of-pocket expenses

You may see out-of-pocket expenses charged with your SBA loan. These cover necessary expenses for the lender, and typically include: filing or recording fees, photocopying, delivery charges, appraisal fees, and necessary reports.

Each out-of-pocket expense must be itemized and kept in the file for review by the SBA at any time.

You may have to reimburse your lender for any direct costs (including overhead) incurred for legal services by in-house counsel. However, these fees can’t exceed the cost of outside counsel, and must be assessed on an hourly basis.

Late payment fee

If you are more than 10 days delinquent on your regularly scheduled SBA loan payment, your lender can charge a late payment fee. It can’t exceed more than 5% of the regular loan payment.

Additional SBA 504 loan fees

Additional allowed fees for 504 loans differ in structure from 7(a) loans, and may be paid to several parties to the loan. Before you review the breakdown, here’s a quick refresher on some loan terminology that differs from 7(a) loans that you’ll see in use below.

• ‍Debenture: a loan funded by investors‍
• Net Debenture: the amount of the SBA portion of your loan that’s actually available for your project after required fees are taken out, or your take-home amount of the loan.‍
• Gross Debenture: the total amount raised through the debenture to fund the SBA portion of the loan, or the sticker price before any fees are deducted.

Conclusion

For small business owners accessing capital through SBA loan programs, understanding the SBA guarantee fee is fundamental. It's just as important to plan for this expense as it is to forecast other business costs. Always make sure to assess the full picture of loan costs and discuss any fee-related questions with your SBA-approved lender.

With careful consideration, the SBA's programs can be a powerful tool in growing and sustaining your business. Your efforts to comprehend the fee structures will position you to make well-informed financial decisions that keep your business's bottom line healthy. Remember, staying informed about the costs of borrowing is essential in the stewardship of your enterprise.

According to the U.S. Small Business Administration (SBA), small businesses account for 99.9% of all businesses in the U.S. But what exactly is a small business?

The SBA sets specific criteria to categorize businesses under the ‘small business’ designation, in order to determine eligibility for support initiatives and funding, like SBA loan programs. Below, we’ll dive deeper into how the SBA defines a small business, so you can determine whether you meet  and qualify for certain benefits.

The SBA definition of a small business.

The SBA defines a small business by the maximum number of employees, or maximum amount of annual receipts it has. However, these maximum limits depend upon the industry of the company, which we'll explore below.

Criteria for qualifying as a small business.

The SBA uses two possible size criteria that a business can qualify as “small” under - the Industry Size Standard, and the Alternative Size Standard.

SBA Industry Size Standard

For each industry classified by the North American Industry Classification System (NAICS), the SBA weighs economic characteristics like:

•  Degree of competition
• Average business size
• Start-up costs and entry barriers
• Distribution of businesses across the industry by size
• Technological changes
• Competition from other industries
• Growth trends
• Historical activity
• Unique factors

Then, the SBA establishes an industry size standard to define a small business in that industry, consisting of the maximum number of employees, or maximum amount of average annual receipts a business can have to be classified as small.

To find the specific size standard for your industry, here’s what to do.

1. Look up your NAICS code.

You’ll need to have your NAICS code on hand to find your size standards. This is a six-digit code number that helps companies explain what they do. You can use the NAICS search tool to find your industry, or read our guide on how to look up your NAICS code for more information.

2. Look up your SBA industry size standard.

Once you’ve found the NAICS code that best describes the primary activity of your business, or the one that produces the most revenue, you can find the SBA size standards for that industry.

Here’s a sampling of several industries and the maximum average annual receipts or number of employees that qualify them as a small business. In reality, there are hundreds of NAICS codes, so you should look at the complete listing in the SBA table of size standards.

3. Verify you meet the SBA size standard

Confirm your employee count, or your annual receipts meets the industry size standard. You can also use the SBA size standards tool to input your information and find out if you meet the SBA’s criteria for a small business.

In addition to maximum average annual receipts and maximum number of employees, the SBA will consider whether your company meets other eligibility requirements for SBA loans.

SBA Alternative Size Standard

Small businesses can also meet the SBA size requirement through the alternative size standard.

To meet this size standard, the business can’t have a tangible net worth over $20 million dollars, and the average net income after Federal income taxes (excluding carry-over losses) for 2 full years before the application can’t exceed $6.5 million.

Benefits of being classified as a small business.

If the SBA does classify your company as a small business, this opens the door to several resources and benefits.

SBA loans

There are a number of SBA loan programs that offer low rates and longer repayment terms you might not be able to find elsewhere.

The 7(a) loan is the SBA’s most popular program and offers up to $5 million in capital for small business owners. Upon approval, you can use this capital to cover a variety of expenses, such as startup expenses, real estate, short- and long-term working capital, and equipment.

Business development programs.

The SBA has Small Business Development Centers (SBDCs) throughout the U.S. to provide small businesses with counseling, training, and technical assistance. Another organization called SCORE also offers free mentorship and resources. You can utilize these development programs if you qualify as a small business.

Government contracts. 

The SBA works partners with federal agencies to award 23% of prime government contract dollars to qualifying small businesses. If you meet the SBA definition for small business, you can submit bids and take advantage of government contracts, which offer an additional, reliable stream of income. 

Research grants

The Small Business and Innovation Research research grants are designed to encourage small business owners to dive into technology and commercialization opportunities. While this is a highly competitive program, it also offers small businesses the chance to expand your technological investment and potentially profit from commercialization.

Tax incentives

As a small business, you can also save money with tax incentives. The Small Business Health Insurance Tax Credit, for example, gives eligible small business owners the chance to save up to 50% of employee health care costs, if they buy insurance from the Small Business Health Options Program (SHOP). Some cities, like Philadelphia, also award tax credits to entrepreneurs and small business owners.

Bottom line

If you believe you’re a small business owner, there’s a good chance the SBA does, as well. But your average annual receipts and number of employees may position you as a medium sized or larger business instead. That’s why it’s wise to do some research and determine where you stand. If the SBA does consider you as a small business, you’ll have access to resources, funding options, and incentives that larger businesses won’t qualify for!

SBA loans are some of the most sought-after forms of small business financing, because of their favorable rates and terms. They also provide small businesses with a premium financial product, without necessarily having the established track record required by banks and traditional financial institutions. For a broader overview of how SBA loans work and what to expect, start with our SBA Loans overview.

However, the SBA loan program has strict eligibility criteria to qualify for 7(a) and 504 loans. As an added layer, the SBA-approved lender who provides your SBA loan will also have their own set of criteria for approval.

In this guide, we’ll break down the general eligibility requirements outlined by the Small Business Administration (SBA), specific criteria for each loan program, and common lender requirements that your small business will have to meet in order to qualify for this government-backed financing.

You’ll learn:

• General SBA loan eligibility requirements (for any SBA loan regardless of type)
• Specific qualification requirements for 7(a) and 504 loans
• What lenders look for, and their requirements to approve an SBA loan

General SBA loan requirements  

Before you can be considered eligible for any SBA loan program, there’s a standard list of eligibility requirements your small business must meet.

Business operations requirements

In order to qualify for an SBA loan, your small business must be:

• An operating business. There are some exemptions for Eligible Passive Companies (EPCs), according to the use of the loan proceeds.
• A for-profit business, officially registered and operating legally. ‍
• Located in, primarily operating in the United States, and authorized to do business in the state or territory where applying for a loan. If the business operates internationally, the loan proceeds can only be used exclusively for U.S. operations.

Size standards

To qualify for an SBA loan, businesses must meet the SBA’s definition of a small business. The business can qualify for this definition in one of two ways - by industry size standards, or by alternative size standards.

Learn more about how the SBA defines a small business.

Industry restrictions

The SBA identifies some business industries, types or characteristics that make them ineligible for SBA loan financing. There are some exceptions to each, but for the most part, if your business is any of the following, you won’t qualify.

• Nonprofit
• Government-owned organization
• Lender, or engages in loan packaging, lending, investment or financing
• Apartment building, mobile home park or nonmedical residential facility
• Developer or landlord leasing land and/or buildings
• Marijuana producer or engaged in the production or sale of marijuana products (some exceptions for hemp products that meet federal definition.)
• Church, synagogue, mosque, or other religious organization
• Business that restricts patronage for any other reason beyond capacity (ex: women’s health club)

Further, if your business engages in any of the following, you won’t qualify.

• Political or lobbying activities
• Gambling
• Illegal activities
• Live adult or lewd performances, services, presentations or displays
• Pyramid or multilevel sales distribution plans

Citizenship requirements

The SBA updated its citizenship eligibility requirements to limit SBA loans to businesses with 100% direct and indirect owners and guarantors who are U.S. citizens, U.S. nationals, or lawful permanent residents ("green card" holders).

A business is ineligible for an SBA loan if any owners or guarantors are “Ineligible Persons”, including foreign nationals, asylum seekers, refugees, visa holders, nonimmigrant aliens, and/or  DACA recipients.

“Credit Elsewhere” rule

If you apply for an SBA loan, you must be able to demonstrate that some or all of the desired funding is not available elsewhere on reasonable terms from non-government sources. In other words, you would not be able to be secure a loan for the amount from a bank or financial institution based on your credit history or other business characteristics. As of June 2025, lenders now assess personal liquidity of owners and guarantors when making the determination if you would be able to meet credit standards from non-government sources.

Going forward, lenders will now certify to the SBA that some of all of the loan is not available from:

• Personal liquidity of owners with 20% or more equity, their spouses and minor children, (with exceptions for reasonable funds to cover future medical, educational and retirement.)
• Conventional lenders or other non-government sources

Your lender will also need to provide detail on the specific factors that demonstrate weakness in your credit for the SBA. Going forward, your lender will not be able to use only your credit score to determine credit weakness.

Business character requirements

In order to be eligible for an SBA loan, your business cannot have any owner incarcerated, on parole, or probation. Criminal history may also prevent qualifying for a loan, depending on the nature of any convictions.

Your business also must be current on any existing government debt obligations, and can not have defaulted on any federal debt that resulted in a loss to the government. This includes prior SBA loans.

Finally, anyone applying for an SBA loan must be current on all federal, state and local taxes, and must have filed federal tax returns to be eligible.

Allowed use of funds

SBA loans have requirements around how funds are used. You can use any SBA loan to:

• Acquire, lease or improve land
• Purchase, convert, expand or renovate one or more existing buildings
• Build new buildings
• Buy or lease equipment or machinery

Each SBA loan program has additional specifications around allowed use of funds. You'll find more detail in the following sections for each loan program.

Guarantee and collateral requirements

Guarantee requirements

All individuals who own more than 20% of the business are required to submit an unlimited personal guarantee to secure an SBA loan, with the exception of SBA Disaster Loans under $200,000. This includes all SBA 7(a) loans, 504 loans, and most microloans.

If you use jointly-owned property as collateral for a loan, your spouse may also have to sign a limited guarantee.

Collateral requirements for SBA loans

Collateral is required for SBA loans in excess of $50,000. Here’s how it works:

To qualify for an SBA loan, there isn't a fixed amount of collateral you have to have. Lenders must use what's reasonable available to secure the loan, even if it doesn't cover the full amount.

So you aren’t required to have a minimum amount of collateral, but you are required to make what you have available depending on the size of your SBA loan.

SBA program specific qualification requirements

In this section, we’ll cover additional requirements beyond the core SBA requirements that apply to 7(a) loans and 504 loans.

SBA 7(a) loan requirements

Once you’ve determined you meet the general SBA loan qualification requirements, there are a few more specific to the SBA 7(a) loan program you’ll need to meet.

Eligible uses of proceeds for 7(a) loans

In addition to the general requirements for use of proceeds, 7(a) loan proceeds can be used for:

• Debt refinancing
• Ownership changes

• Inventory
• Supplies and raw materials
• Working capital

Equity injection rules for 7(a) loans

Equity injections may be required in a few scenarios when applying for a 7a loan. If you’re:

• Starting a brand new business
• Buying an existing business

You’ll typically be required to provide an equity injection (put some of your own money into the business).

Equity injections can be:

• Cash you put into the business
• Seller financing
• Equipment or assets you’re contributing

If you aren’t starting or buying a business, you may not need an equity injection. Your lender will look over whether the existing equity in the business is strong enough. If it is not, you may still be asked to inject equity.

Cash flow requirements for 7(a) loan

When evaluating your application for an SBA loan, lenders will work off the assumption that loan repayment will happen from the businesses cash flow - not assets or collateral. So, if your financials don’t reflect a reasonable ability to repay the loan from cash flow, you won’t be approved.

Credit requirements fo 7(a) loan

The SBA does not require any minimum credit score, time in business, or average monthly sales for 7a loans. However, SBA lenders often have their own requirements for businesses to meet, which we will discuss below.

One notable credit requirement exception is a minimum business credit score (FICO score) of 165 for businesses applying for a  SBA 7(a) small loan. As of June 1, 2025, this increases from the minimum of 155.

SBA 504 Loan Requirements

These loans are intended for small business owners who want to expand their operations. In a nutshell, 504 loans (aka Certified Development Company loans) are laser-focused on real estate.

Eligible uses of proceeds for 504 loans

504 loans are strictly for fixed asset projects, such as:

• Buying land or buildings
• Constructing or renovating facilities
• Purchasing long-term machinery or equipment

Unlike a 7(a) loan, you can’t use a 504 loan for working capital, inventory, refinancing debt that isn’t for financing fixed assets, or buying a business.

Equity injection requirements for 504 loans

Most 504 loan borrowers are required to contribute at least 10% of the total project cost. This is because the loan is a two-part structure between a Certified Development Company (CDC) and a bank or private lender.

The bank typically finances 50%, the CDC finances 40% via the SBA, and you contribute 10-20%.

In some scenarios, you may need to contribute more (15-20%). For example, if your business is a startup (less than 2 years old), or the project involves special-use or limited-market property.

Economic development objectives requirements for 504 loans

504 projects must meet at least one of the following economic development objectives to be eligible for financing:

• Job Creation or retention - the project must create or retain at least 1 job per $90,000 of SBA-guaranteed financing ($140,000 for small manufacturers and energy public policy projects.) In addition, 75% of the jobs must be located in the same community as the project.
• Public Policy goals - The project meets one of the community development or public policy goals outlined by the SBA, including revitalizing a business district of a community, expanding exports, supporting minority, veteran, or women-owned businesses, meeting energy efficiency standards or reducing energy consumption, or supporting rural development.

Net worth and income limits for 504 loans

In order to qualify for an SBA 504 loan, businesses must meet the SBA’s size standards as mentioned before. However, it’s important to note that these cover restrictions on net worth and net income under the Alternative Size Standard. Your business (including associates), must have:

• A tangible net worth of $20 million or less
• An average net income (after federal taxes) for the two full fiscal years before applying of $6.5 million or less. This excludes any carryover losses.

SBA disaster loans requirements

An SBA disaster loan is a low-interest way to recover from the physical and economic damage caused by declared disasters. These loans are open to a more diverse range of businesses than other SBA programs. There are no size restrictions, and private nonprofit organizations, homeowners, and renters can qualify.

You can use a disaster loan for repairing or replacing personal property, real estate, equipment, machinery, inventory, and business assets. Basically, these loans are meant to help you get your operation back where it was before the disaster struck. You’re not allowed to use the funds to try expanding your business beyond where it was pre-disaster.

Here are the 4 main types of disaster loans:

1. Home and Personal Property Loans
To qualify for one of these loans, you aren’t required to own a business. Instead, this program is meant to help a wide variety of victims of a disaster.

2. Business Physical Disaster Loans
For times when a business or organization sustains damage during a disaster, these loans offer up to $2 million to assist in replacing and restoring damaged property. To qualify, you must live in the declared disaster area.

3. Economic Injury Disaster Loans
Not all damage from disasters is of the physical kind. These loans are meant to assist those who may not have experienced physical damage but have still been negatively impacted. If you qualify, you’ll get as much as $2 million to pay for expenses you would’ve been able to handle if not for the disaster.

4. Military Reservists Economic Injury Loans
These loans are meant for business owners who are employing one or more military reservists called to active duty. The SBA provides financing that makes it possible to continue your business operations.

If you have questions about whether or not you are in a presidential and SBA-declared disaster area, you can search by state and territory with the SBA’s online database. Common examples of disasters added to the database include fires, tornadoes, flooding, earthquakes, and drought.

For those who qualify, it’s important to follow the SBA loan requirements as carefully as possible. The first step is registering with the Federal Emergency Management Agency (FEMA). You can do this by calling FEMA at 1-800-621-3362 or visiting DisasterAssistance.gov. Once you’ve received a FEMA registration number, you’ll be eligible to fill out the SBA online application.

Before starting the application, make sure you have this additional information on hand:

• Contact information for all applicants
• Social Security numbers for all applicants
• Employer Identification Number for business applicants
• Deed or lease
• Insurance information
• Business income
• Business account balances
• Business monthly expenses

Once you’ve clicked submit on the application, you’ll need to sit back and wait for the SBA to review your documents and dispatch an inspector. Following an on-site evaluation from the inspector, the SBA will have an estimate for the cost of your damage. You should know that the SBA considers disaster loans a priority, so if you qualify, you’ll get the good news in as little as 3 weeks.

SBA Express Bridge Loans (EBLs) requirements

The Express Bridge Loan (EBL) Pilot Program was created to complement the other disaster loans provided by the SBA. It empowers 7(a) lenders to provide financing on an emergency basis. Of course, the only way to qualify is if the need is tied to a disaster-related purpose.

The key words in the name are “express” and “bridge.” Essentially, these loans provide expedited money to businesses hurt by presidentially-declared disasters. These loans are smaller than most, tapping out around $25,000. The idea is that they help you bridge the gap between the disaster and the arrival of more substantial loans.

This SBA loan program requires that you are located in a primary county or contiguous county that’s been presidentially-declared a disaster area, your business had established a banking relationship with the lender as of the date of the disaster, the funds are used for the survival or reopening of your business, and that the application process must be concluded within 6 months of the qualifying disaster.

Lender requirements for SBA loans

In addition to the eligibility requirements outlined by the SBA, lenders will have their own requirements to qualify for an SBA loan. While these requirements will vary, minimum requirements generally start at:

• Minimum two years time in business
• Credit score of 650+
• $50,000k + annual revenue

As of June 1, the burden is on lenders to verify applicants eligibility for SBA loans, which means your lender will require more documentation from you in areas where the SBA previously handled verification.

Required Documentation

• Six months of business bank statements
• Driver's license or state ID
• Voided check from your business account
• Month-to-date transactions
• Two years of business tax returns
• Two years of personal tax returns from any owners with 20% or more ownership
• Debt schedule
• Year-to-date profit and loss statement
• Year-to-date balance sheet

SBA Loans aren't your only option

While SBA loans are undeniably great, always account for the fact that they take extra time and effort to obtain. You can’t simply stroll along and expect positive results. Do your homework to find the best option, then meticulously gather all the required documents.

Ultimately, the biggest SBA loan requirement is patience. If time is limited and you don’t want to wait for the lengthy SBA approval process, there are other excellent loans you may want to consider. These alternatives include short-term loans, cash advances, equipment financing, and accounts receivable financing.

Each loan product has its pros and cons, which is why it can be helpful to get an expert’s opinion. For questions about a broader range of loan products, including short-term loans and other non-SBA options, feel free to talk to the experts at Lendio. We can answer any questions you have and guide you to the best choice for your needs.

Being your own boss can offer freedom and flexibility. Yet self-employment also comes with many challenges—especially where business funding is concerned. Fortunately, SBA loans can offer a pathway to affordable financing for freelancers, independent contractors, and other small business owners. But there are drawbacks to this type of funding as well. 

This guide covers how SBA loans work for self-employed business owners along with eligibility requirements and application tips. Plus, learn about alternative financing options available for self-employed individuals in case an SBA loan isn’t the right fit for you.

Understanding SBA loans for self-employed individuals

SBA loans are government-backed loans designed to help small businesses access critical funding to start, grow, and expand. Because the federal government helps guarantee SBA loans, they involve less risk and lenders can offer borrowers better terms including:

• Lower interest rates 
• Reduced fees
• Longer repayment terms
• Lower down payments. 

Both traditional and self-employed small business owners—such as sole proprietors, independent contractors, and freelancers—can apply for SBA loans. 

However, self-employed applicants may find it harder to qualify due to inconsistent revenue, limited collateral, or difficulty satisfying other eligibility requirements on SBA loan applications. (See below.)

Eligibility requirements for self-employed SBA loan applicants

As a self-employed business owner, especially a sole proprietor, banks may be hesitant to lend you money according to the SBA. Keep this detail in mind when you choose your business structure if you think you might want to access financing—now or in the future.

All borrowers, self-employed or otherwise, need to satisfy certain criteria when they apply for an SBA loan which can vary by loan program and lender. Typical minimum SBA loan requirements include:

• Own a legally registered, for-profit business located in the U.S. (or U.S. territories)
• Operate a business that doesn’t exceed SBA small business size standards (based on revenue or employee count)
• Have good credit scores (personal and business) 
• Provide enough collateral to secure loan
• Demonstrate you’re unable to access similar financing elsewhere
• Prove you don’t operate an ineligible business type for SBA loans
• Provide a personal guarantee from anyone with 20% or more ownership

SBA lenders often add borrowing requirements in addition to those above. For example, your business may need a minimum amount of revenue to qualify for certain SBA loans. Many lenders also require applicants to have at least two years in business for an SBA 7(a) or 504 loan, though some SBA startup loans may be available after as little as six months.

Types of SBA loans available for independent contractors

If you’re considering an SBA loan as a self-employed business owner, here are some financing options to research further. 

SBA Microloan

SBA microloans could be a solid funding resource for self-employed business owners who don’t need access to particularly large loan amounts. Highlights of these loans include: 

• Loan amount: Up to $50,000
• Average loan size: Around $13,000
• Interest rate: 8%-13% (at time of writing)
• Repayment term: Up to 7 years

Microloans are available through nonprofit intermediary lenders—community-based organizations that help eligible small business borrowers access vital financing for working capital, inventory, supplies, equipment, and other essential business needs.  

SBA 7(a) small loan

Another affordable financing solution to consider as a self-employed business owner is the SBA 7(a) small loan. Key features of the loan include:

• Loan amount: Up to $500,000
• Collateral: May not be required for loans of $50,000 or less
• Interest rate: Negotiable between lender and borrower

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Your creditworthiness and other factors help determine your APR and other loan terms. But lenders can’t charge you more than the SBA maximum. So, the loans should still be affordable compared to other business loans.

SBA Express loan

The SBA Express loan is a type of 7(a) loan that could work well for self-employed business owners who need access to fast funding. Loan highlights include:

• Loan amount: Up to $500,000
• Collateral: Typically not required for loans of $50,000 or less
• Approval time: Potentially within 36 hours

SBA Express loans also feature less paperwork compared to other SBA loan applications. Applicants only need to fill out SBA Form 1919 and complete any other lender-specific paperwork and documentation requirements. If an application qualifies for the loan, the full SBA Express Loan process could take as little as 30 days to complete.

SBA 504 loan

The SBA 504 loan program might also be worth considering for certain self-employed borrowers that need financing to build, improve, or refinance owner-occupied commercial real estate. Key loan features include: 

• Loan amount: Up to $5.5 million
• Down payment: 10%-15% (for businesses established two years or less)
• Repayment term: Up to 25 years

SBA 504 loans involve both a Certified Development Centers (CDCs) and a private lender, making the loan process more complex and time-consuming. If you qualify for this type of financing, it could take several months to complete the loan process.

SBA loan application process for self-employed individuals

Whether you’re self-employed or own a more traditional small business, the SBA loan application process may be intensive. But if you’re willing to put in a bit of legwork, your effort could be worthwhile to secure competitive business financing. 

Below are the basic steps of applying for an SBA loan while self-employed. 

1. Choose the right SBA loan. The SBA backs multiple types of loans. Different loan programs may work better for you depending on your needs and the eligibility criteria. 

2. Review eligibility requirements. Get a general idea of the minimum loan requirements you’ll need to satisfy before applying.

3. Check your credit. Review your personal and business credit scores before applying. (Tip: the minimum FICO SBSS score for an SBA 7(a) loan is typically 155.)

4. Prepare documentation. Be prepared with your business plan, financial paperwork (bank statements, business and personal tax returns, profit and loss statement, balance sheet, etc.), list of collateral, and other supporting documents. Preparing key information ahead of time could improve your chances of a successful loan application.

‍5. Choose an SBA-approved lender. There are several ways to find an SBA lender including searching for an online lender, working with a local bank or credit union, or using the SBA’s lender match system. Remember to compare offers to find the best deal for your situation.

Alternatives to SBA loans for self-employed borrowers

If you can’t find an SBA loan that works for you, here are some alternative borrowing solutions to consider.

• Business credit cards: A business credit card is a type of credit card designed for business use rather than personal expenses. Even as a self-employed business owner, these flexible spending accounts may be easier to qualify for compared to business loans—especially if you have good personal credit. But beware of personal guarantees and higher interest rates with these accounts.
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• Personal loans: Personal loans may be used for startups and businesses with revenue challenges, a lack business credit history, or little time in business. On the negative side, lenders may restrict how you can use the money you borrow with personal loans and you’re personally liable for the debt. According to the Federal Reserve, around 86% of entrepreneurs rely on personal credit (including personal loans) to finance their small businesses when they can’t access business credit. 
  ‍‍
• Online lenders: Business financing from an online lender could offer a variety of funding solutions such as business term loans, equipment loans, business lines of credit, startup business loans, and more. However, while eligibility criteria tends to be more lenient compared to traditional banks and credit unions, you may also face higher interest rates and shorter repayment terms.