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SBA Loan

The government-backed loan your business needs.

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$ .00
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Loan Amount

Up to $5,000,000

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Loan Term

10-30 Years

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Time to Funds

1-2 Months After Approval

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Interest Rate


Meet the SBA, your small business ally.

The US Small Business Administration (SBA) is a federal agency built solely for the purpose of helping small businesses get the funding they need—especially in times of economic hardship caused by events like the coronavirus (COVID-19) pandemic.

Contrary to what you might think, the SBA doesn’t actually foot any of the cash. Instead, it establishes the guidelines for loans and then guarantees a portion of those loans. Because lenders have much less risk in the case of a default, they’re more likely to provide funds to entrepreneurs like you.

Get SBA Aid

Small business owner in her store

Types of Small Business Administration (SBA) Loans 

You can find an SBA loan option to cover just about every nook and cranny of your small business. Some of the most common SBA loans include the 7(a), 504, and SBA Express.

SBA 7(a) Loan

The 7(a) is one of the most flexible SBA loans. You can use it to:

  • Buy land
  • Cover construction costs
  • Buy or expand an existing business
  • Refinance your existing debt
  • Buy machinery, furniture, supplies, or materials

SBA 7(a) Loan Amounts

There are two types of SBA 7(a) loans: SBA 7(a) Standard and SBA 7(a) Small Loan. They have similar rates and terms, but the Small Loan is capped at a maximum loan amount of $350,000.

 SBA 7(a) loans under $25,000 may not require collateral, but higher loan amounts likely will. For loans of $350,000 or higher, the SBA requires your lender to ask for the maximum possible amount of collateral to limit the risk of default. If you don’t have enough business collateral to cover it, that’s okay—many forms of personal collateral will also help you qualify.

If you’re looking for a large amount of money, you can access a 7(a) loan for up to $5 million—if you meet all the qualification requirements.

SBA 504 Loan

SBA 504 loans can be a bit more complicated than 7(a)s. Because you must use a 504 to fund a specific fixed asset, a thorough examination of your project costs will come into play. When your loan is funded, the lender will initially cover 50% of your costs and the SBA will cover 40%—which means that you’re responsible for covering at least 10% right off the bat. You’ll also be required to personally guarantee at least 20% of the loan.

You must use an SBA 504 loan to finance fixed assets, although some soft costs can also be included. Examples of qualifying projects include:

  • Buying an existing building
  • Building a new facility or renovating an existing facility
  • Buying land or making land improvements such as grading, landscaping, and adding parking lots
  • Buying long-term machinery
  • Refinancing debt incurred through the expansion of your business or the renovation of your facilities or equipment

There are some cool perks to the SBA 504 loan. For example, you’ll benefit from 90% financing, longer amortizations, no balloon payments, and fixed interest rates.

To qualify for an SBA 504 loan, your business must have a tangible net worth of less than $15 million and an average net income of $5 million or less for the two years before your application.

SBA Express Loan

If you need cash in a jiffy, the SBA Express is the loan for you. Unlike the somewhat slower review processes you might encounter with other SBA loans, SBA Express applications are reviewed within 36 hours. This doesn’t mean that you’ll get access to funds that fast, though—it often takes at least 30 days to fund your SBA Express loan.

SBA Express Loan Amounts

You can finance up to $500,000 with an SBA Express loan. If your loan amount is more than $25,000, your lender may require you to secure your loan with collateral. The loan can be used as working capital (5–10 year term), a line of credit (7-year term), or a commercial real estate loan (25-year term).

Loan TypeInterest RateTerm LengthMax Loan Amount
SBA 7(a)Maximum rates depend on the loan amount. 5.75– 8.25% for variable-rate loans; 8.5– 11.5% for fixed rate5–10 years for working capital, equipment, or machinery; 25 years for real estate$5 million
 SBA CAPLinesDepending on line limit, between Prime Rate + 2.25–4.75% Up to 10 years $5 million
SBA CDC/504Tied to 5 and 10-year U.S. Treasury rates; currently 4.63% for a 10-year maturity; 4.51% for a 20-year maturity 10 or 20 years $5 million
SBA Disaster Loans As low as 3% Up to 30 years $2 million
SBA Export LoansPrime + 6.5% for loans $50,000 or less; prime + 4.5% for loans over $50,00010 years for working capital or equipment; 25 years for real estate$500,000
SBA Microloans Depends on the lender, but the current range is 8–13% Up to 6 years$50,000

The Benefits of an SBA/Government-Backed Loan

SBA loans offer enviable rates and terms for small businesses. These lower rates are regarded as the biggest benefit of a government-backed business loan for many small business owners: the amount of money saved in interest is a true game-changer.

The down payment requirements are also better with SBA loans. For most business loans, large down payments mitigate the risk of lending to a “risky” borrower. SBA loans, however, have lower down payment requirements—for example, both 7(a) and 504 SBA loans only require a minimum of 10% down. 

Thirdly, with an SBA loan, you may be able to borrow a larger amount of money than would have been accessible via other business loans. Because they’re government-backed loans, there’s less risk created for the lender, which equates to lower interest rates and higher loan amounts for the borrower. With access to greater capital, your business can reach its next level—and beyond.

Lastly, SBA loans are an excellent way to build and improve your credit, which puts you in a stronger position for future financing opportunities. Better credit can qualify you for higher amounts and different forms of financing which is especially important if your business has been struggling since the onset of the pandemic. If you need to jump-start your company, an SBA loan can help.


How to Apply For an SBA Loan

The first step to applying for an SBA loan is choosing what type of SBA loan you want. There are 6 types of SBA loans including CAPLines, a business line of credit. Each type has its own set of advantages you’ll want to consider—from higher loan amounts, lower interest rates, or longer maturities. 

Once you’ve chosen an SBA loan to apply for, you’ll need to gather all of the appropriate documents. Depending on your record-keeping, this phase can take a while to complete. For an SBA loan, you’ll need the following documents:

  • Completed SBA loan application form
  • Personal background statement
  • Personal financial statement
  • Loan proposal
  • One-year financial projection for your business
  • Current profit and loss statements
  • Complete list of current business owners
  • Business license
  • Loan application history
  • 3 years of business tax returns
  • 3 years of personal tax returns
  • Year-to-date balance sheet
  • Debt schedule

After you’ve submitted your loan application to your chosen lender, you may be contacted for further questioning by a loan underwriter. Make sure to answer any questions you receive as quickly as possible so your loan application can proceed. 

Typically, a soft underwriting process occurs next, followed by a loan proposal—if the lender initially likes what it sees. A loan proposal outlines the loan’s terms and lists out any additional fees that accompany the loan. Once signed, a more stringent underwriting process begins. 

If your application passes through this second round of underwriting, you’ll be sent a commitment letter by the lender. Once signed, you can expect to receive your money in a few months.


How Much Can You Borrow From an SBA loan?

The short answer: it depends on what type of SBA loan you take out. The SBA 7(a), CAPLine, and 504 each have a maximum loan amount of $5 million. The next highest is the SBA Disaster Loan, which has a maximum borrowing amount of $2 million. 

For the SBA Export Loan, borrowers may be able to borrow as much as $500,000, and for an SBA Microloan, the maximum is $50,000. 

When deciding which type of SBA loan to pursue, borrowers should consider both the interest rate and the term length. Loans with longer term lengths typically have lower monthly payments, but this also means that you’ll pay more money in interest over time. 

If you have the cash flow to support a higher monthly payment, you may want to consider a loan option with a shorter maturity in order to save money in interest, but the maximum maturity often depends on your plans for the money. If you need the loan to purchase commercial real estate, for example, a 20-year loan maturity may be in your best interest.


SBA Loan Interest Rates

SBA loan interest rates are some of the lowest in the business: they’re based on prime rate, which in turn is influenced by the Federal Funds Rate set by the Federal Reserve. Historically, the Federal Funds Rate is very low (it reached as high as 16.39% in 1981). If you want to save money in interest on a business loan, you will save the most with an SBA loan.


Lendio Makes SBA Applications Easy

At Lendio, we use a proprietary application platform that makes uploading documents fast and easy. We also have personal funding managers available to any business owner who needs help applying. 

Many small business owners who would qualify for an SBA loan don’t apply, simply because they don’t have the time or energy to complete an application. At Lendio, we’ve made it as easy as possible for business owners to access an SBA loan. If you’ve pursued less-than-ideal financing options in the past because you didn’t have the energy to go through the SBA loan process, Lendio is the place for you.


Frequently Asked Questions


Are SBA Loans Paid For by the Government?

No, but they are backed by the US government. Private lenders are responsible for disbursing the entire loan amount to the borrower, and the US government only gets involved if the borrower defaults on the SBA loan. Depending on the loan amount, the SBA may insure up to 85% of the loan, which equates to less risk for lenders. This reduced risk means that lenders are able to offer lower interest rates.    

Are SBA loans Hard to Get?

When compared to other financial products available to small businesses, SBA loans can be considered the most difficult to get mainly because of the eligibility requirements and application length. With underwriting, most lenders can take up to 3 months to approve or deny an SBA loan. 

Are SBA Loans Still Available?

Any borrower looking for COVID EIDL loans should be aware that the SBA stopped taking loan applications for this loan due to lack of funding on January 1, 2022. However, borrowers may not have qualified for other reasons, too—such as having too many employees. 

All other SBA loans, however, are still available.  

Can Anyone Get an SBA loan?

SBA loans have specific eligibility requirements that businesses and business owners must meet. These include:

  • The business is a for-profit business
  • The business has been in operation for 2 years
  • The business operates, or will operate, in the United States or its territories
  • The business owner must be able to prove that they have used or tried alternative financial resources before seeking an SBA loan
  • The business owner has a reasonable amount of equity in the business

Do SBA loans Have to Be Paid Back?

Yes, SBA loans must be paid back. When a borrower agrees to the loan agreement of an SBA loan, they are agreeing to pay back the loan principal with interest.

SBA grants, however, don’t have to be paid back. 

Is an SBA Loan Forgivable?

Yes and no. For a standard SBA 7(a) loan, collateral used to secure the loan may be liquidated. When no assets are left, the SBA may send an “offer in compromise” letter to the business owner. The owner then has 60 days to respond with a settlement amount, which should be based upon:

  • Personal tax returns
  • Financial statements 
    • Balance sheet
    • Income statement
    • Cash flow statement
  • Business tax return

If the SBA agrees to the settlement amount and payment is received, the loan will then be closed.

“Michael made the SBA loan process as efficient, quick, and manageable as possible. He always made himself available for the most important or simple questions, and fought for me when someone had to fight on my behalf. The process itself will always be a large endeavor, but Michael and the team at Lendio do the best job of making it a smooth process.”

Dimitri Blackstone-Karapanos

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