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SBA loan eligibility requirements are the baseline business, financial, and program criteria lenders evaluate when determining whether a small business may be eligible for an SBA loan program. These requirements are established by the U.S. Small Business Administration (SBA) and interpreted by participating SBA-approved lenders, which may apply additional underwriting standards.

Quick summary.

• SBA loan eligibility is based on program rules set by the U.S. Small Business Administration and applied by participating lenders. 
• SBA program rules are typically updated on an as-needed basis rather than on a fixed schedule.
• Lenders commonly evaluate business eligibility, financial health, credit profile and intended use of funds.
• Meeting eligibility requirements does not guarantee loan approval.
• Eligibility criteria and documentation expectations may vary by SBA loan program and lender.

Important note about this guide.

This guide is designed to help small business owners understand the general eligibility requirements SBA lenders commonly evaluate when reviewing SBA loan applications. While the SBA establishes baseline program rules, participating lenders may apply additional criteria based on the SBA loan program and the businesses' financial profile. 

Meeting these eligibility requirements covered in this guide does not guarantee approval, and standards may vary by lender and SBA loan type.

Because SBA loan eligibility requirements are updated periodically by the U.S. Small Business Administration, this page is reviewed and updated as new SBA guidance or program changes are released.

Core SBA loan eligibility requirements.

SBA lenders evaluate several core eligibility factors to determine whether a business is eligible for SBA-backed financing. While specific documentation and underwriting expectations can vary by lender and loan program, these categories represent the baseline eligibility considerations across SBA 7(a) and 504 loan programs.

Business eligibility and operating requirements.

Under SBA rules, an eligible business must meet all of the following operational criteria:

• Be an operating business. There are some exemptions for Eligible Passive Companies (EPCs), according to the use of the loan proceeds.
• Operate as a for-profit business that is legally registered and operating in compliance with applicable laws. 
• Be located in, primarily operating in the United States. If the business operates internationally, the loan proceeds can only be used for U.S. operations.
• Be authorized to do business in the state or territory where applying for a loan. 
• Meet the SBA’s definition of a small business, based on either industry-specific size standards or SBA alternative size standards. 

Use of loan proceeds

SBA loans have specific requirements around how funds may be used. To remain eligible, loan proceeds must be applied to allowable business purposes under SBA program guidelines.

Across SBA loan programs, eligible use of funds generally include:

• Acquiring, leasing or improving land
• Purchasing, converting, expanding, or renovating existing buildings
• Constructing new buildings
• Buying or leasing equipment or machinery

Lenders review the intended use of funds as part of the eligibility determination to confirm alignment with SBA rules. Uses of funds that fall outside SBA-eligible purposes may disqualify a loan from SBA backing. In addition, some programs, like the SBA 7(a) program, allow for more flexible use of funds, such as working capital, inventory, or business acquisition.

Industry eligibility and restricted activities.

The SBA restricts certain industries, business types, and activities from participating in SBA loan programs. Businesses that fall into these listed categories are generally not eligible for SBA financing.

A business is typically ineligible if it is:

• A nonprofit organization or government-owned entity.
• A lender or business engaged primarily in loan packaging, lending, investing, or financing
• An apartment building, mobile home park, or non-medical residential facility.
• A developer or landlord whose primary activity is leasing land or buildings.
• Engaged in the production or sale of marijuana products, except for qualifying hemp products that meet federal definitions.
• A religious organization, such as a church, synagogue, or mosque.
• A business that restricts patronage for reasons other than capacity (for example, a women’s-only health club)

Additionally, businesses are not eligible if they engage in activities such as:

• Political or lobbying activities
• Gambling
• Illegal activities
• Live adult performances or businesses involving prurient sexual content
• Pyramid or multi-level sales distribution plans

Some limited exceptions may apply under SBA rules, but these categories are generally excluded from SBA loan eligibility.

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Ownership, citizenship, and character requirements.

SBA eligibility rules require lenders to evaluate the ownership and character of individuals involved in the business to ensure accountability and compliance with federal standards.

To be eligible:

• As of the date of publication, all direct and indirect owners and guarantors must be:
  
  • U.S. citizens
  • U.S. nationals, or
  • Lawful permanent residents (“green card holders”)
• A business is ineligible if any owner or guarantor is considered to be an “Ineligible Person”, including:
  
  • Foreign nationals
  • Asylum seekers or refugees
  • Visa holders or nonimmigrant aliens
  • DACA recipients

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In addition, SBA rules require that:

• No owner may be incarcerated, on parole or probation, or under indictment for a felony or a crime involving moral turpitude
• The business must be current on all government debt obligations, including prior SBA loans
  The business must not have defaulted on federal debt that resulted in a loss to the government
  
• The business must be current on all federal, state, and local taxes, with required tax filings completed

Failure to meet these requirements generally disqualifies a business from SBA loan eligibility.

“Credit elsewhere” requirement.

SBA loans are subject to the SBA’s Credit Elsewhere requirement, which limits SBA financing to situations where comparable credit is not available on reasonable commercial terms from non-government sources. 

Under SBA rules, lenders must determine and certify that some or all of the requested financing is not reasonably available from:

• Conventional lenders or other non-government sources
• Personal liquidity of owners with 20% or more equity, including spouses and minor children. Certain personal funds may be excluded, such as reasonable reserves for medical, educational, or retirement needs.

Lenders must also document specific factors demonstrating credit weakness. Credit scores alone may not be used as the sole basis for determining whether credit is available elsewhere.

Financial capacity and repayment ability requirements.

Demonstrating the ability to repay the loan is a required component of SBA eligibility. SBA rules require lenders to assess whether the business has sufficient financial capacity to support loan repayment while maintaining ongoing operations.

This evaluation typically includes:

• Review of historical or projected revenue
• Existing debt obligations
• Credit history of owners, and when applicable, the business
• Overall cash flow sufficiency

While the SBA does not set universal financial thresholds, lenders must document repayment ability as part of every SBA loan evaluation.

SBA program-specific eligibility considerations.

While SBA 7(a) and SBA 504 loan programs share the same core eligibility framework, each program includes additional eligibility criteria and underwriting considerations based on how the loan is designed to be used.

The most common SBA loan programs differ in the types of businesses they serve, how loan proceeds may be used, and how lenders evaluate readiness beyond baseline eligibility.

SBA 7(a) loan eligibility considerations.

SBA 7(a) loans are the SBA’s most flexible program and are commonly used for working capital, equipment, business acquisition, and refinancing eligible debt.

In addition to core SBA eligibility requirements, lenders may evaluate:

• How loan proceeds will be used within 7(a) eligible purposes
• Business cash flow relative to requested loan terms
• Owner involvement and management structure
• Collateral availability, where applicable

To learn more about the SBA 7(a) loan program, including program-specific requirements, read our guide to the SBA 7(a) loan program.

SBA 504 loan eligibility considerations.

SBA 504 loans are designed for long-term financing of fixed assets, such as commercial real estate or major equipment.

Beyond core eligibility requirements, SBA 504 eligibility typically depends on:

• Use of proceeds tied to eligible fixed assets
• Job creation or public policy goals
• Project structure involving a Certified Development Company (CDC)

To learn more about the SBA 504 loan program, including program-specific requirements, read our guide to the SBA 504 loan program.

SBA Microloan eligibility considerations.

SBA Microloans are administered by nonprofit, community-based lenders and are intended for smaller financing needs.

In addition to SBA baseline eligibility, Microloan programs may place greater emphasis on:

• Business readiness and operational stability
• Borrower experience and management capacity
• Technical assistance or training participation

To learn more about the SBA Microloan program, including program-specific requirements, read our guide to the SBA Microloan program.

Eligibility vs. approval: Understanding the difference.

Meeting SBA loan eligibility requirements means a business meets the baseline criteria established by the U.S. Small Business Administration to be considered for SBA-backed financing. It does not mean a loan is approved or guaranteed.

After eligibility is established, SBA-approved lenders still evaluate additional factors, which may include:

• Loan structure and repayment terms
• Risk assessment and underwriting analysis
• Program-specific requirements
• Lender-specific credit and documentation standards

Approval decisions are made by individual lenders, not the SBA, and may vary even when two businesses meet the same eligibility requirements.

Insurance requirements (when applicable).

There are several cases where insurance may be required for an SBA loan, depending on collateral, loan structure, or business characteristics. These are typically addressed during underwriting or as a condition of loan approval.

The most common insurance requirement for SBA loans is hazard insurance when using commercial property or assets as collateral for your loan. These assets must be insured in the event of damage or loss. Learn more about SBA hazard insurance requirements here. 

In other cases, the SBA may require life insurance, particularly for sole proprietors, if the business is heavily reliant on one individual. In cases where the business has employees, proof of workers compensation coverage is frequently required.

You can learn more about the types of business insurance available in our guide, or explore a small business insurance quote with Lendio’s partner The Hartford to secure coverage that meets SBA insurance requirements. 

Sources

• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 50 10 — Lender and Development Company Loan Programs. Version 8. Effective June 2025.
• U.S. Small Business Administration (SBA). Policy Notice 5000-876441 Update to SOP 50 10 8 — Citizenship and Residency Requirements and Recission of Procedural Notice 5000-872050. Last updated February 2 2026.
• U.S. Small Business Administration (SBA). 13 CFR 121.102 How does SBA establish size standards? Last updated June 2017.

Related resources

• SBA 7(a) Loan Program
  Learn how the SBA’s most flexible loan program works, including program-specific eligibility requirements, allowable uses of funds, and underwriting considerations.
• SBA 504 Loan Program
  Explore eligibility requirements and project structure for SBA 504 loans, which are designed for long-term financing of commercial real estate and major equipment.
• SBA Microloan Program
  Understand how SBA Microloans differ from other SBA programs and how nonprofit lenders evaluate eligibility and readiness for smaller loan amounts.
• SBA Hazard Insurance Requirements
  Learn when insurance may be required as part of an SBA loan and how insurance requirements are applied during underwriting or as a condition of approval.
• How to Apply for an SBA Loan
  Get an overview of the SBA loan process, including what lenders evaluate after eligibility is established and how approval decisions are made.

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Financing your business with an SBA loan can help you grow your business with long term, low interest financing. SBA loans are one of the most sought after forms of financing for small businesses, but come with their share of requirements to get approval. One of those lesser-known requirements is hazard insurance, particularly if you’re securing your loan with collateral such as commercial property or equipment.

What is hazard insurance?

Hazard insurance is a type of business property insurance that covers damage to the physical property caused by accidents, damage, weather, and some natural disaster-related incidents. Your specific insurance policy will outline “covered events”. These are the types of events that may occur and cause damage to your property. When that happens, your hazard insurance kicks in and covers the damage within the limits of your policy.

Most hazard insurance policies typically cover the following events that cause damage to the physical property, or significant business property inside such as furniture, equipment, tools, and inventory:

• Theft and vandalism
• Fire or explosions
• Weather and storm damage
• Vehicle damage
• Water damage (such as damage caused by burst pipes)

Hazard insurance doesn’t extend over every type of event. Typically, these types of events are not covered under a hazard insurance policy, and require additional coverage policies:

• Personal belongings
• Liability for the property
• Natural disasters, such as floods, earthquakes, and landslides
• Damage as a result of lack of maintenance, or maintenance issues

When is hazard insurance required?

Hazard insurance isn’t only required for business loans. The most common scenario when a hazard insurance policy is required is for a mortgage on a home. However, most lenders will require a hazard insurance policy on any property—personal or commercial—used to secure a loan, or on the commercial property you are financing with your loan. 

The reason why hazard insurance is required by lenders is straightforward. Your lender has a significant financial stake in your property or equipment. If that property is damaged or destroyed, hazard insurance means they can recoup their investment. Plus, it also protects you from the loss of what is undoubtedly an expensive purchase! 

This also applies to property or commercial equipment used as collateral. If your collateral is destroyed or damaged, lenders are exposed to risk if you default on your loan. With hazard insurance on the property, they can mitigate that risk.

Where do you get hazard insurance?

Hazard insurance, or commercial property insurance, is available through most insurance companies that cover small businesses. For example, Lendio’s partner The Hartford offers commercial property insurance policies individually, or bundled within a larger Business Owners Policy to offer essential coverage to small businesses.

SBA hazard insurance requirements.

Like most lender policies on hazard insurance, the SBA hazard insurance requirement applies to property that is used as collateral. Most SBA loans, including 7(a) and 504 loans, require some type of collateral in order to be approved. 

Because it’s used as collateral, the property must be properly insured. That way, if there’s any damage done that’s out of your control, the building can be repaired or replaced and still maintain its value.

Here’s the breakdown on hazard insurance requirements for each type of SBA loan:

Hazard insurance vs. other insurance policies.

Hazard insurance is often confused for other types of business insurance. And, not all insurance companies refer to property insurance as hazard insurance. Instead, they may call it commercial property insurance. Here are some other types of small business insurance to know as you look for coverage required by the SBA.

Commercial Property Insurance

Commercial property insurance is the same thing as hazard insurance. Any covered events provide reimbursement for building repairs, as well as damaged items within the building. With this type of insurance, you would need to file a claim for your business. Then an insurance adjuster would assess the damage and provide you with reimbursement accordingly.

Flood insurance

Anytime your commercial property is located in a flood zone and used as SBA loan collateral, you’ll need a flood insurance policy as well. That’s because damage caused by flooding is not typically included in most hazard or property insurance policies. 

To see if you need flood insurance, first visit FEMA’s online flood map tool to see if your property’s address is located in a flood zone, and then check your need for insurance when you apply for an SBA loan. If you do, you will need to pay an extra premium, but it will be worth the investment, if you’re in an area at risk of flooding. 

Earthquake insurance

Similar to floods, earthquake damage is not covered in most hazard insurance policies, but is instead covered under a specialized insurance. This insurance is usually optional, unless your business is located in a high-risk zone, such as near a fault line.

You can check whether you’re located near a fault line with the U.S. Geological Survey’s interactive map and speak to your insurance agent to learn more.

Business interruption insurance

While a hazard insurance policy protects your commercial property from physical damage caused by hazards, it doesn’t usually cover business interruption, or lost income due to being unable to operate due to a covered hazard. This type of insurance can be a separate policy, or in some cases, added onto your hazard insurance policy.

General liability insurance

As mentioned before, hazard insurance doesn’t cover liability. This is a separate policy, called general liability insurance, which covers bodily injury, legal defense, and property damage to others, not your own property.

Limitations of hazard insurance.

Hazard insurance policies don’t give your business an automatic blank check when a covered event occurs. Each policy comes with a coverage limit for both the building and the property within. So it’s important to get a policy large enough to cover a worst-case scenario, such as a total loss.

Your hazard insurance policy will also come with a deductible—the amount you’re responsible to pay before your coverage kicks in.

Satisfying your SBA lender’s hazard insurance requirements.

When you apply for an SBA loan, your lender has to confirm that you carry the right hazard insurance on any assets pledged as collateral. Here’s what that means in practice, and what you need to do to stay compliant.

1. Make sure you’re insuring the right assets.

For SBA 7(a) and 504 loans over $50,000, hazard insurance is required on:

• Any real estate pledged as collateral
• Any business personal property used as collateral (equipment, inventory, fixtures, etc.)

If the property cannot be insured, the SBA will not allow the loan to be approved. This is why lenders almost always ask for proof of hazard insurance early in the process.

2. Verify you have enough coverage.

The SBA requires coverage, or replacement cost, at:

• Full replacement cost whenever possible
• Maximum insurable value if a full-replacement policy isn’t available.

This ensures the lender’s collateral can be completely restored after a covered loss.

 3. Add the required lender clauses to your policy.

This is one of the most important steps, and easy to overlook. Depending on what your collateral is, you’ll need to add the following:

• If the collateral is real estate - Your policy must have a Mortgagee Clause naming the SBA lender for 7(a) loans, or CDC/SBA for 504 loans.
• If the collateral is business personal property - Your policy must have a Lender’s Loss Payable Clause, naming the SBA lender for 7(a) loans, or CDC/SBA for 504 loans.

These clauses essentially say:

• The lender's interest cannot be invalidated by the borrower’s actions
• The insurer must give the lender at least 10 days written notice before cancelling the policy. 

4. Secure any additional hazard-related policies required

Some states or localities require separate policies for things like:

• Wind or hail
• Earthquakes
• Named storms

If your business is in one of these states, the SBA requires you to carry those additional policies. If your property also is in a FEMA-designated Special Flood Hazard Area, you’ll also need to secure flood insurance to move forward with your loan.

5. Provide proof of insurance to your lender.

Lenders will typically require a declaration page listing coverage amounts, evidence of the required clauses naming the lender, contact information for the insurance provider, and confirmation of policy dates. 

6. Maintain your coverage throughout the life of the loan.

The hazard insurance requirement doesn’t end once your SBA loan closes. You must:

• Keep the policy active
• Keep the required lender clauses in place
• Notify the lender if you switch carriers
• Maintain replacement cost or maximum insurable coverage

Lenders may periodically ask for updated proof of insurance, so keep these documents on hand to provide your lender with current copies.

Getting proper hazard insurance is just one step in obtaining an SBA loan. Lendio’s team of experts can help you throughout the entire process. Apply for an SBA loan now!

An SBA guarantee fee is a program-level fee charged on certain SBA loans to offset the cost of the U.S. Small Business Administration guaranteeing a portion of the loan. While the fee is assessed to the lender, SBA rules allow lenders to pass this cost on to the borrower. The fee applies only to the portion of the loan guaranteed by the SBA, not the total loan amount.

What changed for SBA guarantee fees in FY 2026.

The U.S. Small Business Administration updated SBA loan fee structures for Fiscal Year 2026, with changes that affect both the SBA 7(a) and 504 loan programs.

Key FY 2026 updates include:

• SBA 7(a) guarantee fees remain largely unchanged from prior guidance, with upfront fees continuing to vary based on loan size and loan maturity.
• New for FY 2026: SBA introduced full fee waivers for qualifying manufacturer loans (NAICS sectors 31-33) under the SBA 504 program, eliminating both the upfront guarantee fee and the annual service fee for these borrowers.
• SBA 504 fees were reinstated for most non-manufacturer loans, introducing both an upfront guarantee fee and an annual service fee for FY 2026.
• SBA 504 Debt Refinance without Expansion loans now include a supplemental annual service fee when issued to non-manufacturer borrowers.

These changes apply to loans approved between October 1, 2025 and September 30, 2026, unless additional SBA program guidance is issued.

Quick summary.

• SBA guarantee fees are upfront program fees associated with SBA-guaranteed loans.
• SBA guarantee fees apply to SBA 7(a) and SBA 504 loans, but not to SBA Microloans.
• The fee is calculated as a percentage of the SBA-guaranteed portion of the loan, not the full loan amount.
• Fee amounts vary based on loan size, loan term, and SBA program type.
• New for FY 2026: qualifying manufacturer loans (NAICS sectors 31–33) under the SBA 504 program are eligible for full waivers of both the upfront guarantee fee and the annual service fee.
• The SBA publishes annual updates to lender fees, including the guarantee fee, for the following fiscal year.

The fee rates shown on this page reflect FY 2026 SBA guidance, effective for loans approved October 1, 2025 - September 30, 2026.

SBA 7(a) guarantee fees: Fiscal year 2026.

The SBA guarantee fee applies only to the SBA-guaranteed portion of the loan, not the total approved loan amount. Fees vary based on loan size and maturity and are established annually by the U.S. Small Business Administration.

SBA 7(a) guarantee fees: Loans with a maturity of 12 months or less.

SBA 7(a) guarantee fees: Loans with a maturity of more than 12 months.

Special SBA 7(a) programs.

SBA Express Loans (Veteran-Owned Businesses)

For SBA Express loans made to businesses owned and controlled by a veteran or the spouse of a veteran, the upfront SBA guarantee fee is 0%, in accordance with Section 7(a)(31)(G) of the Small Business Act.

Export Working Capital Program (EWCP) guarantee fees

EWCP loans have a separate upfront guarantee fee structure based on loan maturity.

SBA 504 guarantee Fees: Fiscal Year 2026.

SBA 504 loan fees are established annually by the U.S. Small Business Administration and apply only to the CDC (SBA-backed) portion of the loan. Fee treatment varies by borrower type and 504 program option.

SBA 504 fees: Loans approved October 1, 2025 through September 30, 2026.

Manufacturer loans (NAICS Sector 31-33)

For SBA 504 loans approved in FY 2026 to qualifying manufacturers, the SBA has waived both the upfront guarantee fee and the annual service fee.

This waiver applies to:

• Standard SBA 504 loans
• 504 Debt Refinance with Expansion
• 504 Debt Refinance without Expansion

All other SBA 504 loans (excluding Debt Refinance without Expansion)

For SBA 504 loans approved in FY 2026 that are not manufacturer loans and not part of the Debt Refinance Without Expansion program, the following fees apply:

SBA 504 Debt Refinance Without Expansion (Non-Manufacturer loans)

For SBA 504 loans approved in FY 2026 under the Debt Refinance Without Expansion program, and not made to manufacturers, the SBA applies an additional supplemental annual fee.

Important context for SBA 504 fees.

• SBA 504 fees apply only to the CDC portion of the loan, not the bank or borrower equity portion.
• The upfront guarantee fee is assessed once at loan funding.
• The annual service fee is assessed on the outstanding CDC loan balance over time.
• Fee waivers and supplemental fees are determined by borrower classification and program type, not by lender discretion.

How SBA guarantee fees are calculated.

SBA guarantee fees are calculated based on the portion of the loan guaranteed by the SBA, not the total approved loan amount. The exact fee depends on the SBA loan program, loan size, and loan maturity.

Step 1: Identify the SBA-guaranteed portion.

Each SBA loan program guarantees only a portion of the total loan amount. For example, SBA 7(a) loans are typically guaranteed at 75% or 85%, depending on loan size, while SBA 504 loans apply fees only to the CDC (SBA-backed) portion of the loan.

Step 2: Apply the applicable fee rate.

The SBA publishes guarantee fee rates annually by fiscal year. The appropriate rate is applied to the guaranteed portion of the loan based on:

• Loan program (7(a), 504, EWCP, or Express)
• Loan amount tier
• Loan maturity (12 months or less vs. more than 12 months)
• Borrower classification or program option, where applicable (such as manufacturer status for certain 504 loans)

Step 3: Distinguish upfront vs. ongoing fees.

• Upfront guarantee fees are assessed once, typically at loan approval or funding.
  Annual service fees, when applicable (such as for SBA 504 loans in FY 2026), are assessed on the outstanding guaranteed balance over time and are separate from the upfront guarantee fee.

Important calculation notes

• SBA guarantee fees are not calculated on the full loan amount.
• Fee rates are set by fiscal year, not by lender discretion.
• Certain SBA programs and borrower categories may qualify for fee waivers or modified fee structures based on SBA guidance.

For questions about how SBA guarantee fees apply to a specific loan structure, lenders typically rely on official guidance issued by the U.S. Small Business Administration.

Example SBA guarantee fee calculations (FY 2026).

Note: These examples are for illustration only. Actual fees depend on SBA program rules, the SBA-guaranteed portion, loan structure, and any applicable waivers or program options.

Example 1: SBA 7(a) loan under $150,000, (maturity more than 12 months).

Scenario

• Loan amount: $100,000
• SBA guarantee: 85%
• FY 2026 upfront fee rate: 2% of the guaranteed portion

Calculation

• Guaranteed portion: $100,000 × 85% = $85,000
• Upfront guarantee fee: $85,000 × 2% = $1,700

Example upfront guarantee fee: $1,700

Example 2: SBA 7(a) loan over $700,000 (maturity over 12 months).

Scenario

• Loan amount: $2,000,000
• SBA guarantee: 75%
• FY 2026 fee structure:
  
  • 3.5% of the guaranteed portion up to $1,000,000
  • 3.75% of the guaranteed portion over $1,000,000

Calculation

• Guaranteed portion: $2,000,000 × 75% = $1,500,000
• First $1,000,000 × 3.5% = $35,000
• Remaining $500,000 × 3.75% = $18,750

Example upfront guarantee fee: $53,750

Example 3: SBA 504 loan (manufacturer), FY 2026.

Scenario

• CDC (SBA-backed) portion: $1,200,000
• Borrower qualifies as a manufacturer (NAICS sectors 31–33)

FY 2026 treatment

• Upfront SBA guarantee fee: waived
• SBA annual service fee: waived

Example SBA fees:$0 upfront, $0 annual service fee

Important FY 2026 SBA guarantee fee rules for 7(a).

These rules affect how upfront guarantee fees are applied in certain scenarios under the SBA 7(a) program for FY 2026.

Multiple 7(a) loans approved within 90 days.

In many cases, if two or more SBA 7(a) loans (with maturities over 12 months) are approved for the same borrower (including affiliates) within 90 days, the SBA treats them as one combined loan for purposes of determining:

• The SBA guaranty percentage, and
• The applicable upfront guarantee fee tier

Note: This treatment may differ when one of the loans is a Working Capital Program (WCP) loan or an Export Working Capital Program (EWCP) loan.

Special treatment when WCP or EWCP loans are involved.

When one or more loans in the 90-day window is a WCP or EWCP loan, SBA rules may:

• Combine loan amounts to evaluate eligibility for certain fee relief (such as manufacturer-related relief), but
• Treat WCP/EWCP loans separately for upfront fee calculation, since those fees are based on maturity terms outlined for those programs

Extending a short-term 7(a) loan beyond 12 months.

If a short-term SBA 7(a) loan (12 months or less) is later extended to a maturity over 12 months, an additional upfront guarantee fee may be due based on the revised maturity.

Increasing a 7(a) loan after approval.

If an SBA 7(a) loan is increased, an additional upfront guarantee fee may apply to the increased amount. In FY 2026 guidance, the additional fee is generally determined by:

• The fee rules in effect at the time the loan was originally approved, and
• What the total upfront fee would have been if the increase had been part of the original loan amount (minus any upfront fee already paid)

Fee avoidance restrictions.

SBA rules prohibit structuring or splitting loans for the purpose of avoiding upfront guarantee fees. These rules apply even if loans are approved by different lenders.

Sources

• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 50 10 8 - Lender and Development Company Loan Programs. Last updated June 2025.
• U.S. Small Business Administration (SBA). SBA Information Notice - 7(a) Fees Effective October 1, 2025 for Fiscal Year 2026 and 90-Day Rule Clarification. Effective August 28, 2025.
• U.S. Small Business Administration (SBA). SBA Information Notice - 504 Fees for Fiscal Year 2026. Effective August 28, 2025.

SBA loan maximums are the highest loan amounts allowed under each U.S. Small Business Administration loan program. These limits are set by the SBA and vary by program type, loan purpose, and structure, helping ensure borrowers are not over-leveraged while providing access to affordable financing.

Current as of January 2026

SBA loan maximum amounts are established by the U.S. Small Business Administration and do not change on a regular schedule. As of this update, there have been no changes to SBA loan maximum limits for the 7(a), 504, or Microloan programs.

Quick summary: SBA loan limits at a glance.

• The maximum SBA 7(a) loan amount is $5 million.
• SBA 504 loans support projects with SBA-backed portions up to $5.5 million.
• SBA Microloans are capped at $50,000.
• Actual loan size depends on program structure and use of proceeds.
• Most businesses qualify for less than the maximum allowed amount.

SBA loan maximums by program.

SBA 7(a) loan program maximum loan amounts by loan type.

The SBA 7(a) loan program has a maximum loan amount of $5,000,000. This cap applies to the total loan amount, regardless of how funds are used, and represents the highest amount the SBA will support under the 7(a) program.

Within the SBA 7(a) program, the SBA offers several loan types designed for different financing needs. These types don’t change the overall program maximum, but some have lower loan size limits, or different SBA guarantee levels.

SBA 504 loan program maximum loan amounts by project type.

The SBA 504 loan program has a maximum loan amount of $5,500,000. This cap applies to the highest amount the SBA will support under the 504 program.

The nature of the specific 504 project influences what the loan limit will be for the SBA’s portion.

SBA Microloan program maximum loan 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.

How SBA loan maximums are set.

SBA loan maximums are established by the U.S. Small Business Administration and are designed to balance access to capital for small businesses with responsible risk management. These limits are not based on individual borrower qualifications, but on program-level policy decisions set at the federal level. The limits are defined in official SBA program guidance and Standard Operating Procedures (SOPs.) These limits apply nationwide and are not adjusted based on industry, location, or lender preference.

The maximums represent the upper limits allowed under each program, not the amount a business will qualify for. Actual loan size depends on factors such as cash flow, credit profile, use of proceeds, and lender underwriting standards.

Sources

The information in this article is based on official guidance and program rules published by the U.S. Small Business Administration and is intended to explain general SBA loan term limits and structural requirements.

• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 50 10 8 - Lender and Development Company Loan Programs. Last updated June 2025.
• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 52 00 B - Microloan Program. Last updated June 2018.‍
• U.S. Small Business Administration (SBA).SBA Standard Operating Procedure (SOP) 50 10, Appendix 13 - 7(a) Manufacturers' Access to Revolving Credit (MARC). Last updated October 2025.

Related Resources

• SBA Loan Interest Rates (updated monthly)
• SBA Loan Eligibility Requirements
• SBA Loan Terms and Duration

SBA loan terms refer to the maximum repayment periods allowed under SBA loan programs, which vary based on the loan type and how the funds are used. The SBA sets term limits to align repayment length with asset lifespan and borrower repayment ability, rather than allowing arbitrary loan durations. 

Current as of January 2026

SBA loan terms and duration are established by the U.S. Small Business Administration and do not change on a regular schedule. As of this update, there have been no changes to maximum SBA loan terms for the 7(a), 504, or Microloan programs.

Quick summary.

• SBA loan terms range from up to 6 years to up to 25 years
• Longer terms apply to real estate and major fixed assets
• Shorter terms apply to working capital and revolving needs
• Lenders must use the shortest appropriate term under SBA rules
• Term length affects monthly payment size, not just total cost

SBA loan term limits by program.

Based on SBA program guidance from the U.S. Small Business Administration.

SBA 7(a) loan program - term limits by type and use of funds.

Under the SBA 7(a) program, maximum loan terms depend on the program, loan structure, and how the loan proceeds are used.

Important notes on 7(a) program term limits:

• Maximum term length is determined by use of funds, not just loan program.
• When IRS useful life estimate is referenced, the asset’s estimated life must support the extended term.
• SBA lenders must generally use the shortest appropriate repayment term allowed under SBA guidelines.
• Construction or renovation periods are separate from loan amortization. When construction or renovation is included in the use of proceeds, the SBA allows an additional period reasonably necessary to complete that work to be added before amortization begins.

SBA 7(a) Standard loan term limits.

SBA 7(a) loan terms vary based on how funds are used rather than a single fixed maturity.

In general:

• Working capital and inventory loans are capped at up to 10 years.
• Equipment terms may extend up to 15 years if supported by IRS useful life estimates.
• Real estate-related uses may extend up to 25 years, with construction or renovation time added where applicable.
• Farm-related uses follow separate term limits for land, structures, and equipment.

See the table above for use-specific maximums.

SBA Express loan term limits.

SBA Express loans follow different maturity rules depending on whether they are structured as a term loan or a line of credit.

• Term loans follow the same maturity limits as Standard SBA 7(a) loans, based on use of funds, with maximum terms ranging up to 25 years for real estate-related uses.
• Lines of credit, whether revolving or non-revolving, have a maximum maturity of 10 years.

For revolving lines of credit:

• The revolving period is limited to up to 5 years
• During this time, funds may be drawn, repaid, and re-borrowed
• After the revolving period ends, any outstanding balance is converted to a non-revolving loan and must be fully repaid within the 10-year total maturity limit

For non-revolving lines of credit:

• Funds may be drawn up to the approved limit
• Re-borrowing is not permitted
• The line must be fully repaid within the 10-year maturity limit

SBA CAPLines term limits.

SBA CAPLines are designed for short-term and cyclical financing needs, and have program-specific maximum maturities, depending on the type of CAPLine:

• Builder’s CAPLine loans are capped at up to 5 years
• Working Capital, Contract, and Seasonal CAPLines may extend up to 10 years

These maturity limits define the maximum legal repayment period for each CAPLine program.

Seasonal CAPLine Clean-Up requirement.

Seasonal CAPLines include a mandatory clean-up period each season. The borrower must reduce the outstanding balance to $0 for a minimum of 30 consecutive days. This demonstrates that the business is not dependent on borrowed funds year-round, but instead uses the CAPLine to support seasonal operating cycles.

CAPLines exit strategy requirement.

All SBA CAPLines require a defined exit strategy. The final advance under the CAPLine must occur far enough in advance of the maturity date. This ensures any assets acquired or financed through the CAPLine can be converted back into cash. This converted cash must be sufficient to fully repay the loan balance by maturity. 

SBA Export Express term limits.

SBA Export Express loans have different maturity limits depending on how the loan is structured.

• When structured as a term loan, Export Express loans follow the same maturity rules as Standard SBA 7(a) loans, with maximum terms based on use of proceeds and extending up to 25 years for eligible real estate uses.
• When structured as a line of credit, the maximum maturity is 7 years, regardless of whether the line is revolving or non-revolving.

For Export Express lines of credit:

• Funds may be drawn up to the approved limit
• Revolving and non-revolving structures are permitted
• The full balance must be repaid within the 7-year maturity limit

International Trade Finance term limits.

International Trade Finance loans follow the same maturity rules as Standard SBA 7(a) loans.

• Maximum loan terms are determined by use of proceeds
• Real estate-related uses may extend up to 25 years
• Equipment and working capital uses follow standard SBA 7(a) limits

The International Trade designation affects eligibility and purpose, but does not alter maximum maturity limits. 

Export Working Capital Program (EWCP) loan term limits.

Export Working Capital Program (EWCP) loans are designed for short-term, transaction-based export financing and have a maximum allowable maturity of 36 months.

Actual loan terms are often shorter and depend on the structure of the EWCP loan.

Transaction-specific EWCP loans.

When an EWCP loan is structured to support a single export transaction:

• The loan term may extend up to 36 months
• Any maturity longer than 12 months must be supported by lender documentation and justification to the SBA
• The term is tied to the lifecycle of the underlying export transaction

Transaction-based EWCP lines of credit.

When structured as a transaction-based line of credit:

• The loan term is typically up to 12 months
• The line may be approved for up to 36 months through annual renewals
• Each renewal is treated as a new loan, subject to new SBA guarantee fees

Asset-based (ABL) EWCP loans.

Asset-based EWCP loans follow a similar renewal structure:

• Typically issued with a 12-month term
• May be renewed annually for up to 36 months total
• Each renewal is treated as a new loan and requires a new SBA guarantee

Important notes on EWCP maturity:

• The 36-month limit represents the maximum allowable maturity, not a guaranteed loan length.
• EWCP loans are structured as self-liquidating, short-term financing tools
• EWCP renewals are treated as new loans. Each renewal is subject to a new SBA guarantee fee and independent approval.

Manufacturers’ Access to Revolving Credit (MARC) loan term limits.

MARC loans follow different maturity rules depending on whether they are structured as a term loan, or a revolving loan.

• Term loans have a maximum maturity of 10 years. 
• Revolving loans have a maximum maturity of 20 years.

For revolving loans:

• The revolving period is limited to up to 10 years.
• During this time, funds may be drawn, repaid, and re-borrowed.
• After the revolving period ends, any outstanding balance is converted to a non-revolving loan and must be fully repaid within the 20-year total maturity limit.

SBA 504 loan program - term limits by type and use of funds.

SBA 504 loans provide long-term, fixed-rate financing for major fixed assets. Term lengths are standardized at 10, 20, or 25 years, depending on the project and asset type.

• Fixed-rate, asset-based financing
• Term tied directly to asset class:
  
  • 10 years - equipment (but could qualify for 20-25 years depending on useful life)
  • 20-25 years - real estate
• When the 504 loan is used for mixed assets, such as real estate and equipment, the term of the asset that the majority of the funds are used for will apply.

SBA Microloan loan program - term limits.

SBA Microloans are capped at up to 10 years, regardless of use of funds, reflecting their role as small-dollar, short-term financing.

What determines the length of an SBA loan?

SBA loan terms are determined by four primary factors:

1. SBA loan program rules
2. Use of proceeds
3. Asset type and useful life
4. Structural requirements defined by the SBA

Loan length is not determined by borrower preference alone, and longer terms are not automatically available for all uses.

What longer vs. shorter SBA loan terms mean in practice

• Longer terms = lower monthly payments, longer payment horizon
• Shorter terms = higher monthly payments, faster payoff
• Term length does not change SBA eligibility rules

What SBA loan length does not tell you.

An SBA loan’s maximum allowable term does not:

• Guarantee approval for that term length
• Indicate interest rate or total cost
• Replace lender underwriting requirements
• Apply uniformly across all loan structures

Why SBA loan length rules are often misunderstood.

SBA loan term rules are frequently misunderstood because:

• Maximum maturities vary by use of funds, not just program
• Some loans include draw periods or construction phases
• Certain programs rely on annual renewals, not single long terms
• Many summaries oversimplify SBA guidance

In summary, SBA loan lengths vary widely by program and structure, with maximum terms determined primarily by use of proceeds, asset type, and SBA program rules rather than borrower preference.

Sources

The information in this article is based on official guidance and program rules published by the U.S. Small Business Administration and is intended to explain general SBA loan term limits and structural requirements.

• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 50 10 8 - Lender and Development Company Loan Programs. Last updated June 2025.
• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 52 00 B - Microloan Program. Last updated June 2018.
• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 50 10, Appendix 13 - 7(a) Manufacturers' Access to Revolving Credit (MARC). Last updated October 2025.

Related Resources

• SBA Loan Interest Rates (updated monthly)
• SBA Loan Eligibility Requirements
• SBA Loan Fees

‍The SBA does not set minimum credit score requirements for SBA loans.‍

Instead, the U.S. Small Business Administration requires SBA-approved lenders to evaluate a borrower’s overall creditworthiness and financial stability using prudent commercial lending standards. Credit score is one factor in that evaluation, but it is not the only factor. Acceptable credit profiles may vary by lender and SBA loan program.

Because lenders retain responsibility for underwriting SBA-backed loans, different lenders may weigh credit history differently based on risk tolerance, loan structure, and the borrower’s broader financial profile.

Quick Summary: SBA loans and credit scores.

• The SBA does not publish minimum credit score cutoffs.
• SBA lenders assess credit as part of a broader financial review.
• Both personal and business credit history may be considered.
• Cash flow, debt obligations, and business stability often matter as much as credit.
• Credit expectations vary by lender and SBA loan program.

Why credit still matters for SBA loans.

SBA loans are partially guaranteed by the federal government, but lenders still carry risk and are responsible for repayment outcomes. As part of standard underwriting, lenders review a borrower’s credit history to better understand financial behavior and repayment reliability.

Credit reports help lenders evaluate factors such as:

• Payment history and consistency
• Existing debt obligations
• Credit utilization and account management
• Patterns that may signal financial stress or stability

A stronger credit profile can help reinforce an application, but weaker credit does not automatically disqualify a borrower if other aspects of the business are strong.

How SBA lenders use credit scores in practice.

While the SBA does not establish minimum credit score requirements, many SBA-approved lenders apply internal credit benchmarks or evaluation standards as part of their standard underwriting process. These benchmarks are set by individual lenders based on risk management policies and are not dictated by the SBA. As a result, acceptable credit profiles may vary from one lender to another.

SBA lenders typically also evaluate credit in context.

That means credit history is reviewed alongside:

• Business cash flow and ability to service debt
• Time in business and operating stability
• Existing liabilities and obligations
• Management experience and ownership structure
• Collateral, when applicable

In some cases, strong cash flow or collateral may help offset a less-established credit profile. In others, credit concerns may prompt a lender to request additional documentation or structure the loan differently.

Does credit evaluation differ by SBA loan program?

While the SBA does not assign credit score requirements to specific loan programs, lenders may apply different underwriting approaches based on the loan type.

For example:

• SBA 7(a) loans are commonly evaluated based on overall repayment ability, including cash flow, credit history, and business fundamentals.
• SBA 504 loans may involve additional scrutiny due to their real estate focus and lien structure.
• SBA Microloans are often administered by nonprofit intermediaries that emphasize business readiness, planning, and local economic impact alongside credit considerations.

These differences reflect lender practices, not SBA-imposed credit thresholds.

What lenders look for beyond credit scores.

Credit is only one piece of an SBA loan application. Lenders often review a combination of financial and operational factors, including:

• Overall credit profile and payment history
• Current cash flow and projected income
• Existing business and personal debt
• Financial statement and tax returns
• Owner equity invested in the business
• Business plan and growth outlook
• Collateral, when required by the program

A well-prepared application that demonstrates financial stability can help lenders feel confident even when credit history is not perfect.

Strengthening your credit profile before applying.

If you’re preparing to apply for an SBA loan, improving your credit profile may strengthen your application. Common preparation steps include:

• Reviewing personal and business credit reports for accuracy
• Addressing outstanding delinquencies or past-due accounts
• Reducing outstanding debt when possible
• Avoiding unnecessary new credit inquiries
• Maintaining consistent, on-time payments over time

These actions support a stronger overall financial picture rather than targeting a specific score.

Can you still qualify with lower or limited credit history?

Some borrowers with limited or imperfect credit histories may still qualify for SBA financing, depending on the lender and program. Lenders may consider additional strengths such as:

• Consistent business cash flow
• Valuable collateral or equity contribution
• Several years of operating history
• Strong management experience
• Clear financial documentation and projections

Because underwriting standards vary, outcomes can differ from lender to lender.

Credit is one part of the SBA loan equation.

When it comes to SBA loans, credit score alone does not determine eligibility. Lenders assess credit as part of a broader review of financial health, business stability, and repayment capacity.

Understanding how lenders evaluate credit—and preparing your full financial profile accordingly—can help you approach the SBA loan process with clearer expectations and stronger readiness.

Sources

• U.S. Small Business Administration (SBA). SBA Standard Operating Procedure (SOP) 50 10 — Lender and Development Company Loan Programs. Version 8. Effective June 2025.
• U.S. Small Business Administration (SBA). SBA Procedural Notice 5000-875701—Sunset of SBSS Score for 7(a) Small Loans. Effective March 1, 2026.

An SBA 7(a) loan is a government-backed small business loan that provides up to $5 million in flexible financing for working capital, equipment, real estate, and business expansion.
The U.S. Small Business Administration (SBA) guarantees a portion of each loan to reduce lender risk, making capital more accessible for qualified businesses. Created under Section 7(a) of the Small Business Act, this program is widely used for growth initiatives, business purchases, and refinancing existing debt.

When to use an SBA 7(a) loan.

SBA 7(a) loans are designed to support a wide range of business needs, especially those that improve long-term financial health or strengthen the business’s ability to grow.

Loan proceeds can be used for working capital, expansion, equipment, real estate, acquisition, or refinancing existing debt under qualifying conditions.

What SBA 7(a) loan funds can be used for.

Working capital and operations

• Operating expenses
• Inventory purchases
• Seasonal cash-flow gaps

Equipment and asset purchases

• Purchasing new or used equipment
• Equipment installation and upgrades
• Buying furniture, fixtures, technology, or supplies

Real estate projects

• Purchasing owner-occupied commercial real estate
• Refinancing existing owner-occupied real estate
• Building a new facility
• Renovating or expanding an existing property

Business acquisition or expansion

• Buying an existing business
• Funding startup costs (in eligible cases)
• Expanding a current business
• Changes of ownership, when structured and SBA-approved
• Multiple-purpose loans, such as partial acquisition and working capital

Refinancing existing business debt

SBA 7(a) loans can consolidate or refinance business debt when the refinancing improves cash flow or meets SBA benefit requirements.

What SBA 7(a) loan funds cannot be used for.

Loan proceeds from SBA 7(a) loans cannot be used for purposes that do not benefit the business directly, or do not meet the SBA’s lending standards. Ineligible uses include:

• Paying off or refinancing an existing SBA loan
• Buying out a partner, unless part of SBA-approved ownership change structure
• Paying delinquent federal or state withholding taxes
• Payments or distributions to business owners that do not serve a business purpose
• Any purpose that the SBA deems not sound, speculative, or primarily personal

Eligibility requirements for SBA 7(a) loans.

Most U.S. small businesses can qualify for an SBA 7(a) loan if they meet SBA standards for location, business purpose, size, and creditworthiness. The SBA sets nationwide rules for who is eligible, while individual lenders may have additional requirements. Your business must meet all of the following SBA criteria to be eligible.

1. Business type and status

• Must be a for-profit business
• Must be actively operating
• Must operate within the United States or U.S. territories‍
• Must be in an eligible industry

2. Business size standards

Must meet the SBA’s definition of a small business. The SBA defines a small business based on industry-specific size standards that consider factors like annual revenue and number of employees.

3. Ability to repay

• Must demonstrate sufficient cash flow to support loan payments
• Personal credit history and business financials must show responsible borrowing behavior

4. Equity and owner participation

• 100% of direct and indirect owners and guarantors must be U.S. citizens, U.S. nationals, or lawful permanent residents ("green card" holders)
• The business must show reasonable owner equity investment
• Owners with over 20% ownership must provide:
  • Unlimited personal guarantee
  • Financial disclosures

5. Use of proceeds

• SBA loan proceeds must be used for sound business purposes
• Must not be used for ineligible or personal purposes (see When to Use an SBA 7(a) loan)

6. Exhaustion of other financing options

Borrowers must demonstrate that they are unable to obtain credit elsewhere on reasonable terms.

Ineligible businesses.

Certain business types cannot qualify for SBA loans, including:

• Nonprofit organizations
• Financial businesses primarily engaged in lending
• Real estate investment firms not occupying property
• Businesses engaged in illegal activities
• Pyramid sale distribution plans
• Certain restricted membership organizations, such as private clubs
• Speculative or investment-based ventures

Common disqualifiers for SBA 7(a) loans.

A borrower may be ineligible for a 7(a) loan if:

• The business or owner has delinquent federal debt
• The owner has recent criminal activity (the SBA evaluates case-by-case)
• The business cannot demonstrate ability to repay
• Loan proceeds would be used for ineligible purposes
• Insufficient equity injection for acquisition or startup funding
• Some or all of the owners or guarantors are not U.S. citizens, U.S. nationals, or lawful permanent residents

Lender-driven requirements for SBA 7(a) loans.

In addition to the SBA program rules, lenders typically layer on additional requirements:

• Minimum personal credit score (often 640-680+)
• Minimum time in business (often 2+ years, but this can vary)
• Minimum revenue thresholds
• Collateral requirements for loans over a certain size
• Bank statement health, including consistent cash flow

These requirements are not SBA rules, but instead are lender underwriting standards.

Learn more about SBA loan eligibility

For a deeper breakdown, including full disqualifier lists, industry restrictions, and eligible use of proceeds, read our complete guide to SBA loan eligibility requirements.

Types of SBA 7(a) loans.

The SBA offers several loan programs under the 7(a) umbrella, each designed to serve different business needs. These factors include loan size, speed of funding, working capital structure, or international trade.

When choosing a 7(a) loan type, consider:

• How much funding you need
• How quickly you need the funds
• Whether you need a term loan, or line of credit
• Your intended use of the loan proceeds

Below is an overview of the primary SBA 7(a) loan types, followed by a explanations of each.

Standard SBA 7(a) loan

The standard 7(a) loan is the SBA’s most common and flexible loan option.

Best used for:

• Working capital
• Equipment and supplies
• Owner-occupied real estate
• Business expansion or acquisition

Key features:

• Loan amounts from $350,000 to $5 million
• SBA guarantees 85% of loans up to $150,000 and 75% for larger loans
• Collateral is required
• SBA provides final approval before issuing a loan number

7(a) small loan

The 7(a) small loan is designed for businesses that need a smaller amount of financing, but want the benefits of SBA backing.

Key features:

• Maximum loan amount: $350,000
• Same guarantee structure as Standard 7(a) loans
• No collateral required for loans under $50,000
• Faster processing compared to larger SBA loans

SBA Express loan

The SBA Express loan prioritizes speed and convenience, with much faster approval and processing times than traditional 7(a) loans.

Best used for:

• Businesses that need faster access to capital

Key features:

• Maximum loan amount: $500,000
• SBA guarantee: 50%
• Lenders make eligibility, credit, and collateral decisions under delegated authority from the SBA
• Response time of 36 hours or less

Export-focused SBA 7(a) loans

The SBA offers three specialized 7(a) programs to support businesses involved in international trade.

Export Express loan

A streamlined option for businesses entering or expanding export operations.

Key features:

• Maximum loan amount: $500,000
• SBA guarantee:
  
  • 90% for loans up to $350,000
  • 75% for larger loans
• Can be structured as a term loan or revolving line of credit
• Lines of credit may last up to 7 years
• 24-36 hour response time

Export Working Capital Program (EWCP)

Designed to fund working capital directly tied to export sales.

Key features:

• Loan amounts up to $5 million
• SBA guarantee: 90%
• Working capital terms up to 10 years
• Equipment financing up to the useful life of the asset (max 15 years)
• Real estate terms up to 25 years

International Trade loan

Built for businesses that need to expand exports or modernize operations to compete internationally.

Key features:

• Loan amounts up to $5 million
• SBA guarantee: 90%
• Working capital terms up to 10 years
• Equipment financing up to the useful life of the asset (max 15 years)
• Real estate terms up to 25 years

SBA CAPLines

CAPLines are SBA-backed revolving lines of credit designed for businesses with cyclical or short-term working capital needs.

General features:

• Loan maximums and guarantees align with Standard 7(a) loans
• Structured as lines of credit rather than lump-sum loans

Types of CAPLines

Working Capital CAPLine

For businesses with accounts receivable and/or inventory that needs asset-based financing.

Contract CAPLine

For businesses performing work under contracts, covering costs tied to specific projects.

Builders CAPLine

For construction contractors and builders financing residential or commercial projects.

Seasonal CAPLine

For businesses with predictable seasonal revenue cycles. These businesses must demonstrate prior seasonal patterns to qualify.

7(a) Working Capital Pilot (WCP) program

The WCP program offers monitored, asset-based lines of credit for certain industries.

Key Features:

• Loan amounts up to $5 million
• Available to businesses in manufacturing, wholesale, and professional services
• Requires at least one year of operating history
• Requires detailed financial reporting, including inventory and receivables
• SBA guarantee aligns with standard 7(a) loans

SBA 7(a) loan rates, fees, and repayment terms.

SBA 7(a) loans are structured to support long-term small business growth, with interest rates, fees, and repayment terms designed to balance affordability with lender risk. While the SBA sets maximum limits, the final loan terms are determined by the lender based on borrower qualifications and loan structure.

SBA 7(a) loan interest rates

SBA 7(a) loan interest rates are set by the lender, not the SBA. Rates are based on factors such as:

• Creditworthiness
• Loan amount
• Repayment term
• Business financial strength

Borrowers may accept, reject, or sometimes negotiate the offered rate with the lender.

How SBA 7(a) interest rates are calculated

Most SBA 7(a) loans use a prime-based interest rate, which may be fixed or variable.

Interest rate formula:

Prime Rate + Lender Markup (capped by the SBA)

As of January 5, 2026, the prime rate is 6.75%. The SBA allows lenders to add a markup, but caps how high the total interest rate can be, depending on loan size and repayment term.

Want current SBA rate caps?

For exact SBA 7(a) rate ranges, monthly caps, and a full explanation of how your rate is calculated, see our guide to SBA loan interest rates.

SBA 7(a) guarantee fees

In addition to interest, SBA 7(a) loans require a one-time SBA guarantee fee. This fee helps offset the cost of the SBA’s loan guarantee and is typically financed into the loan.

How guarantee fees work

• Fee amount depends on loan size and 7(a) loan type
• For FY 2025, guarantee fees typically range from 2%-3.5%
• Fees are assessed only on the guaranteed portion of the loan

See full guarantee fee tables

For a complete breakdown of SBA 7(a) guarantee fees by loan size and year, read our guide to SBA guarantee fees.

Other SBA 7(a) loan fees (and what fees are prohibited)

One of the advantages of SBA loans is fee transparency.

Fees the SBA prohibits

The SBA expressly prohibits lenders from charging most common loan fees, including:

• Application fees
• Origination fees
• Processing fees
• Renewal fees
• Brokerage fees

Permitted lender fee

Lenders may charge a flat fee of up to $2,500 per loan, regardless of loan size.

Estimate your SBA 7(a) loan payments

Curious what your monthly payment might look like for an SBA loan?

Use our SBA loan calculator to estimate payments, based on your loan amount, rate, term, and fees.

SBA 7(a) loan repayment terms (maturity)

SBA loans are designed for long-term repayment, with maturity periods tied to the loan’s purpose and the useful life of the assets financed.

‍Loan maturity refers to the total time a borrower has to repay the loan. The final payment is made at the end of the maturity term.

Asset life rule

When SBA 7(a) loans are used to purchase fixed assets, such as real estate, equipment, or commercial property, the loan maturity is limited to the economic life of the asset. This can not exceed 25 years.

Fixed assets are long-term assets that:

• Are not easily converted to cash
• Are intended for ongoing business use
• Include real estate, machinery, and furniture

How SBA 7(a) loans work.

SBA 7(a) loans follow a structured approval process designed to ensure borrowers meet eligibility requirements, and lenders are protected by the SBA’s guarantee. While lenders handle most of the underwriting, the SBA plays a key role in approving and backing the loan.

Below is a step-by-step overview of how the SBA 7(a) loan process works.

Step 1: Define your loan purpose and funding needs

Before applying, you must clearly identify:

• How much funding you need
• How you will use loan proceeds
• Whether the use of funds meet SBA eligibility requirements

Your proposed loan purpose impacts:

• Loan type
• Repayment term
• Collateral requirements
• SBA approval criteria

Step 2: Confirm your eligibility

Next, you must meet SBA eligibility requirements related to:

• Business type and size
• Location and ownership
• Ability to repay
• Access to other financing

Lenders typically conduct an initial eligibility review before moving forward.

Step 3: Choose the right SBA 7(a) loan type

Based on funding needs and timing, you’ll select the most appropriate 7(a) loan type:

• Standard 7(a)
• 7(a) small loan
• SBA express
• Export-focused 7(a) loan
• CAPLine

The loan type determines:

• Maximum loan amount
• SBA guarantee percentage
• Approval speed

Step 4: Gather required documents

SBA loans require detailed financial documentation, which may include:

• Business and personal tax returns
• Financial statements
• Business debt schedule
• Business plan, or use of funds explanation
• Ownership and management details

Having documents prepared in advance can significantly reduce approval time.

Step 5: Apply with an SBA-approved lender

Borrowers apply directly through an SBA-approved lender, not with the SBA itself.

The lender:

• Reviews creditworthiness
• Structures the loan
• Determines collateral requirements
• Submits the loan to the SBA (or approves under delegated authority where applicable)

Step 6: Lender underwriting and SBA review

Depending on the loan type:

• Standard 7(a): SBA provides final approval
• Express/delegated loans: Lender makes approval decision

The SBA then assigns a loan authorization number, which enables funding.

Step 7: Loan closing, funding, and repayment

Once approved:

• Loan documents are finalized
• Funds are disbursed
• Repayment begins according to the agreed term

Borrowers must maintain compliance with loan agreements throughout the repayment period.

How to apply for an SBA 7(a) loan.

To apply:

1. Choose an SBA-approved lender
2. Prepare financial and business documentation
3. Submit an application for review
4. Respond to underwriting questions
5. Complete loan closing

Timelines vary, but approvals can take several weeks for standard loans, and as little as a few days for SBA Express loans.

Applying for an SBA loan

Interested in applying for an SBA loan? Read our complete guide to the SBA loan application process.

Bottom line: Is an SBA 7(a) loan right for your business?

An SBA 7(a) loan is one of the most flexible and widely used financing options available to small businesses, offering government-backed funding for working capital, equipment, real estate, expansion, and debt refinancing. With long repayment terms, capped interest rates, and broad eligibility, 7(a) loans are designed to support sustainable business growth rather than short-term cash needs.

While SBA loans require more documentation and a longer approval process than many alternative financing options, they often provide lower costs and longer maturities in exchange. For businesses that can meet eligibility requirements and prepare the necessary paperwork, and SBA 7(a) loan can be a powerful tool for long-term stability and expansion.

Key takeaways:

• SBA 7(a) loans offer up to $5 million in flexible, government-backed financing
• Funds can be used for working capital, equipment, real estate, acquisitions, and refinancing
• Interest rates are prime-based with SBA-imposed caps
• Repayment terms extend up to 25 years, depending on loan purpose
• Approval timelines vary by loan type, with Express options available for faster funding‍
• Strong preparation and documentation significantly improve approval odds

Related resources

Learn more about SBA loans:

• SBA Loan Eligibility Requirements
  
• SBA Loan Interest Rates Explained
  
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Whether you’re a seasoned investor or a novice entrepreneur, commercial real estate rates will always be a focal point guiding your investment decisions.

This article will simplify commercial mortgage rates, shedding light on key points of consideration and practical strategies to optimize your investments.

Current commercial real estate rates.

As of January 2026, we're seeing rates that range from about 5.17% to 15%, depending on the asset type and specific circumstances of the loan.

Key elements of commercial real estate rates.

Commercial mortgage rates are determined based on a combination of market factors, property-specific factors, the stance of the lender and borrower, and the loan structure.

Market conditions

Overall market conditions play a role in determining commercial real estate rates. Several macroeconomic factors contribute to rate fluctuations.

Economic factors

Commercial mortgage rates are influenced by broader economic conditions, such as inflation, economic growth, and the overall health of the economy.

Interest rates

The general level of interest rates in the economy—often indicated by benchmark rates such as the prime rate, LIBOR (London Interbank Offered Rate), or the U.S. Treasury yields—can impact the rates offered by lenders.

It's important for borrowers to carefully consider these factors and work with lenders to secure the most favorable terms, based on their financial situation and the specific details of the commercial property transaction.

Property-specific factors

The nature of the property itself will significantly impact mortgage rates, namely property type and location will also impact your final rate.

Property type

Different types of commercial properties may have varying risk profiles, affecting the interest rates. For example, rates for office spaces might differ from those for industrial properties.

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Location

The location of the property can impact rates. Properties in high-demand or economically thriving areas may have lower rates compared to those in less desirable locations.

Borrower's creditworthiness

Your creditworthiness and general financial situation will impact your rate.

Credit score

The creditworthiness of the borrower is a crucial factor. Lenders assess the borrower's credit history, financial stability, and debt-to-income ratio to determine the risk associated with the loan.

Business financials

Lenders may also evaluate the financial health and performance of the business occupying the commercial property.

Loan-to-value (LTV) ratio

The loan-to-value (LTV) ratio is the percentage of the property’s value that you’re looking to finance with the loan.

If you’re looking for a high LTV ratio, it means you’re seeking to borrow a larger portion of the property’s value, which could present a higher risk to the lender. Because of this increased risk, you may find that higher LTV ratios are typically accompanied by higher commercial mortgage rates.

Loan term and amortization period

Rates will also vary based on the length of the loan and the repayment schedule.

Loan term

The length of the loan term can influence the interest rate. Shorter-term loans may have lower rates but higher monthly payments, while longer-term loans might have slightly higher rates but lower monthly payments.

Amortization period

The time it takes to repay the loan (i.e. the amortization period) can also impact the interest rate. A longer amortization period may result in a higher overall interest cost.

Lender's policies and competition

Every lender's rates are impacted by its investment portfolio and competition.

Lender policies

Each lender may have its own criteria and policies, impacting the rates they offer. Some lenders may specialize in certain property types or industries.

Competition

The competitive landscape among lenders can affect rates. Borrowers may get more favorable rates if lenders are competing for their business.

Fixed vs. variable rates

Commercial mortgage rates can be fixed (i.e. unchanging throughout the loan term) or variable (i.e. fluctuating based on market conditions). Fixed rates provide stability, while variable rates may offer initial cost savings but involve more risk. Borrowers should choose the type of rate that aligns with their financial goals and risk tolerance.

SBA 504 loan rates: An option for small businesses.

For entrepreneurs seeking to finance major fixed assets like real estate or equipment, the Small Business Administration's (SBA) 504 loan can be a great option. The SBA 504 loan is known for its competitive and predictable rates, making it a popular choice among borrowers.

Fixed-rate loans under this program are tied to U.S. Treasury bonds, which typically carry some of the market's best rates.

• The rates for SBA 504 loans are set when the SBA sells the bond to fund the loan. This means borrowers can lock in a low, long-term fixed rate, protecting their business from future interest rate increases. The 10-year Treasury rate as of January 2026 is around 4.15%.

It's also essential to understand that SBA 504 loan rates include two different loans—one from a Certified Development Company (CDC) and one from a bank or other financial institution.

• The CDC loan, which covers up to 40% of the total project cost, has a fixed interest rate.
• In contrast, the bank loan, covering 50% or more of the total project cost, can have a variable or fixed rate, depending on the specifics of the agreement.

Remember, despite these attractive rates, it's important to consider all aspects of your financial situation and business goals before deciding on a loan product. Consult with financial professionals to make sure you're making the best choice for your business.

Wrapping up

By familiarizing yourself with the primary elements that influence these rates, and keeping an eye on current market conditions, you’re already on the right path.

Whether you're considering a traditional commercial mortgage or exploring options like the SBA 504 loan, remember that the best choice will depend on your unique financial situation and business goals.