Lending Library

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.

Insurance requirements

There are several cases where insurance may be required for your SBA loan, depending on collateral and/or business characteristics.

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. 

‍Begin a small business insurance quote with The Hartford now.

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 for 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, revenue-based financing, 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.

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.

Explore a small business insurance quote with The Hartford to get the coverage you need to satisfy SBA hazard insurance requirements.

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

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
  
• SBA Guarantee Fees Guide

Compare SBA financing options:

• SBA 7(a) vs SBA 504 Loans

Estimate your 7(a) loan costs:

• SBA loan calculator

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.

Yes, you can almost always get fast small business financing. Here are five small business loans that can fund in just 24 hours.

When your business needs a quick cash infusion to deal with unexpected expenses, seize growth opportunities, or meet urgent operational costs, fast business loans come to the rescue. These loans are designed for swift approval and funding—often within 24 hours—making them an ideal choice for situations where traditional loan processes may be too slow. 

This guide will walk you through the various options for a quick business loan, helping you make an informed decision that suits your business needs.

Fastest types of business loans.

Here are five quick business loans and other financing structures that provide fast approval times, as well as quick funding. The terms and repayment structures vary for each type of loan or financing, so take a look to see which might be the best option for your company.

1. Business term loan

A term loan is a lump sum of cash that is repaid with interest over a set period, typically ranging from one to 10 years. These loans are available through traditional banks, as well as alternative lenders and online platforms. The application process can take anywhere from a few days to several weeks, but certain lenders offer expedited application processing, approval and funding for those in need of fast business loans.

Individual lenders for business term loans will offer different terms, but these feature ranges are typical: 

• Loan amount: $1,000-$6 million
• Loan repayment term: 1-7 years
• Interest rate: 9.99% and up
• Funding time: As soon as same business day

Compare business term loan lenders.

2. Line of credit

A business line of credit is similar to a credit card. You have a credit limit you can draw upon at any time, and you pay interest only on the amount you draw. A line of credit can help cover short-term needs such as paying for inventory or seasonal changes in cash flow.

Features of a business line of credit can include:

• Loan amount: Up to $3 million
• Loan repayment term: 6-24 months
• Interest rate: 8% and up
• Funding time: As soon as same business day

Compare line of credit lenders.

3. Revenue-based financing

Revenue-based financing isn't a loan, but an advance based on future sales. This makes qualifying easier since the financing company considers revenue and sales more than your credit history. The repayment is an agreed-upon percentage of your income that comes directly from your bank account each day until your balance is repaid. This type of financing is ideal for companies with stable cash flow.

Features of revenue-based financing, also called a business cash advance, are as follows:

• Loan amount: Up to $2 million
• Loan repayment term: 3-36 months
• Factor rate: As low as 1.08
• Funding time: As soon as same business day

Compare revenue-based financing companies.

4. Equipment financing

Equipment financing is an excellent option for businesses that need to purchase or lease new equipment quickly. This type of loan covers a wide range of items like machinery, vehicles, office technology, and more. The equipment itself serves as collateral for the loan, which often results in more favorable terms, since the lender has a secure form of repayment. Depending on the lender, you might be able to finance up to 100% of the equipment cost.

Features of equipment financing are as follows:

• Loan amount: $5,000-$5,000,000
• Loan repayment term: 1-10 years
• Interest rate: 7.5% and up
• Funding time: As soon as same business day

Compare equipment financing companies.

5. Invoice factoring

Invoice factoring allows you to get paid faster for your outstanding invoices. With invoice factoring, the financier will purchase your invoice at a discounted rate, giving you a percentage of the money upfront. Then, after the customer pays the invoice in full to the funder, you receive the rest of the money, minus a fee. Funds from invoice factoring can be available as soon as the same day. Plus, the factoring company handles collecting payment from your customers, freeing up your time and resources for other areas of your business.

Features of invoice factoring are as follows:

• Loan amount: Up to 85% of invoice value
• Loan repayment term: Up to 1 year
• Factoring fee: As low as 3%
• Funding time: As soon as same business day

Compare invoice factoring companies.

When to get a fast business loan.

While speed to funds is one factor to consider when comparing business loan options, it’s important to compare multiple factors when selecting a business loan including the total cost of the loan and the maximum loan amount. In some cases, waiting a few more days or weeks will allow you to work with a lender who can offer more favorable terms.

Some common reasons to get a fast business loan include:

• Immediate working capital needs
• Unexpected business expenses
• You don’t qualify for a traditional bank or SBA loan

Fast Small Business Administration (SBA) loan options.

In some scenarios, the Small Business Administration (SBA) provides expedited loan options that offer both speed and beneficial terms, making them a worthwhile consideration for businesses in need of swift funding.

SBA Express Loans

An SBA Express Loan is a variant of the popular SBA 7(a) loan with a faster approval time. This expedited process, often within 36 hours, offers loan amounts up to $350,000.

Applying for an SBA 7(a) Small Loan with Lendio.

Lendio offers a convenient SBA loan application process. While it might take 30 to 90 days with your local bank, potential borrowers can complete an application and get a pre-approval within 24 hours, and after providing the required documentation, can get funded with a 7(a) small loan in fewer than 30 days.

How to get a fast business loan.

Follow these steps to obtain fast business funding:

1. Determine your needs - Understand the exact amount you require and the purpose of the loan. Make sure a fast business loan is the right choice for your needs.

2. Check your credit score - Lenders will consider your personal and business credit scores when determining approval and rates. Ensure your credit is in good standing to increase your chances of approval.

3. Gather necessary documents - This usually includes business and personal tax returns, bank statements, balance sheets, and a detailed business plan. Having these documents ready can speed up the process significantly.

4. Compare lenders - Different lenders offer different terms, requirements, and rates. Research and compare multiple lenders to find the one that best fits your needs.

5. Submit your application - Complete your loan application with your chosen lender. Be thorough and accurate to avoid unnecessary delays.

Remember, while fast business loans provide quick access to capital, they may come with higher rates and shorter repayment terms. Consider all your options and understand the terms before making a decision.

Pros and cons of fast business loans.

Just like any financial product, fast business loans come with their own set of benefits and drawbacks. Understanding these pros and cons can help you make a more informed decision.

Pros of fast business loans:

1. Quick access to capital - The most significant advantage of fast business loans is their speed. When your business needs funds immediately, these loans can provide cash within one business day, making them an ideal solution for emergencies.

2. Simple application process - Fast business loans typically have a straightforward online application process that can be completed within minutes, without the need for extensive paperwork.

3. Potential for approval with bad credit - Many fast business loan providers are more flexible with credit score requirements, which can be beneficial for businesses with a less-than-stellar credit history.

Cons of fast business loans

1. Higher rates - The convenience and speed of fast business loans often come at a cost. The rates can be significantly higher than those of traditional business loans.

2. Short repayment terms - Fast business loans usually must be repaid relatively quickly, often within a few months to a few years. This could potentially strain your cash flow.

3. Risk of debt cycle - If used improperly or over-relied upon, businesses may find themselves in a cycle of debt, taking out another loan to pay off the previous one.

Before applying for a fast business loan, weigh these pros and cons carefully. Consider how the repayment terms and rates will impact your business's cash flow and growth, and consult with a financial advisor if needed.

How to compare fast business loans.

When you're considering a fast business loan, it's all about striking the right balance between speed, terms, and cost. Here's how to navigate the maze and compare multiple options effectively.

Understand your urgency

Your first step is assessing the urgency of your financial needs. Do you require the funds within 24 hours, or can you wait a week or two? The urgency will narrow down your options and help you focus on lenders who can meet your timeline.

Know your numbers

Financial literacy is non-negotiable in the world of business funding. Calculate exactly how much you need, and more importantly, how much you can afford to repay. Use loan calculators and projections to understand the long-term impact of the loan.

Read the fine print

The devil is in the details. While speed is your priority, don't skim over the terms and conditions. Look for prepayment penalties, additional fees, and any other clauses that could affect your small business negatively.

Review the repayment terms

Fast business loans often come with shorter repayment terms. Ensure you can meet the daily, weekly, or monthly repayments without straining your cash flow. If you can't find a loan with terms that suit your business's financial rhythm, it may not be the loan for you.

Evaluate the total cost

The Annual Percentage Rate (APR) is a common benchmark for evaluating the total cost of a loan, especially for term loans, lines of credit and other traditional financing products.. The lower the APR, the cheaper the loan. However, APR isn’t the full story, and in many cases it may not be used. For example, some business financing products, like revenue-based financing or invoice factoring don’t charge interest. Instead, they use a factor rate or a fee-based model. Make sure you understand the fee structure for your loan, and also consider the application fees, processing fees, and any other costs that could push the total cost up.

Shop around

Don't settle for the first offer or even the third. Approach multiple lenders and use the competitive landscape to your advantage. You might find that you're eligible for lower rates or better terms than you initially thought.

Secure or unsecured?

Fast loans can be secured against your assets or unsecured, with no collateral required. While secured loans often have lower rates, unsecured loans are quicker and don't put your personal or business assets at risk.

Understand credit score repercussions

Applying for multiple loans can impact your credit score, so be strategic. If your credit score allows, consider pre-qualification offers that give you a rough idea of what you qualify for without a hard credit check.

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