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Launching a startup can be an exciting yet unpredictable challenge. Expenses often pile up before your first sale or invoice payment. Even a solid business plan can run into cash flow gaps that stall growth or make it tough to cover day-to-day costs. 

That’s where a startup business line of credit can help. This flexible financing tool gives you on-demand working capital when you need it most. But like any business funding tool, it also comes with benefits and drawbacks. 

Before you apply, it’s important to understand how a business line of credit for startups works, what lenders look for, and how its pros and cons stack up against other funding options.

How business lines of credit work for startups.

A typical business line of credit is a revolving form of financing, similar to a business credit card (though often with higher credit limits and different repayment terms). Instead of receiving a lump sum upfront as you would with a term loan, you qualify for a credit limit and only borrow what you need, when you need it. You pay interest solely on the funds you draw, not the full credit limit. And as you repay, your available credit resets. The cycle repeats throughout the draw period.

For example, if your startup secures a $50,000 revolving credit line and you draw $10,000 for a project, you’ll only pay interest on that $10,000 until you repay the balance. Once you pay back the money you borrowed, the full $50,000 limit becomes available to use again.

This revolving structure gives startups breathing room between pay cycles, new projects, or product launches. For many founders, that flexibility makes business credit lines a preferred financing alternative to long-term debt.(Note: Some lenders also offer fixed lines of credit. This financing option lets you borrow once and repay without the ability to draw again.)

Startup eligibility factors.

Qualifying for a business line of credit depends on each lender’s eligibility criteria. Banks tend to prefer established companies. Online lenders often work with newer businesses that demonstrate repayment ability.

• Time in business: Traditional lenders, such as Wells Fargo or American Express, may prefer to work with borrowers that have one to two years in business. However, online lenders may accept newer startups (at least six months of operating history) that can show steady deposits or strong financial projections. Within the Lendio Marketplace, we partner with multiple lenders who offer lines of credit to businesses from brand new startups, to those with 6 months - 1 year in business. 
• Revenue and cash flow: Consistent monthly revenue demonstrates an ability to repay the money your business borrows. Requirements vary, but startups with at least $8,000 in monthly revenue often have better approval odds.
• Personal and business credit scores: Both your business credit and personal credit matter. If your company is new, strong personal credit may help offset limited business credit history and help you qualify for better rates.
• Collateral or personal guarantee: Some lenders may ask for collateral, like business equipment or inventory, if you’re applying for a secured business line of credit. If collateral isn’t an option, a personal guarantee might also boost approval odds or help you secure lower interest rates.‍
• Financial statements and projections: Lenders may review financial statements (e.g., bank statements, profit-and-loss reports, cash flow forecasts, etc.) when you apply for a startup credit line. These documents can help show that your business has a plan to manage and repay the money it borrows.

Meeting lender requirements doesn’t guarantee approval for financing, but it may put your company in a better position. If your business is too new to qualify with a bank, Lendio’s marketplace includes lenders that specialize in startup-friendly business financing.

Pros of a business line of credit for startups.

A business line of credit can be a valuable resource when you’re building a company from the ground up. Below are some of the top advantages for startups. 

Flexible funding for fluctuating cash flow

Most startups haven’t had a chance to establish predictable income yet. You might make a big sale one month and barely break even the next. Although this situation can be stressful, it’s part of the growth process. A business line of credit for startups can help you manage that inconsistency.  

You might use a line of credit to cover inventory purchases before a busy season, fund marketing campaigns, or handle payroll while waiting for invoices to clear. That flexibility is why many small business owners prefer a revolving credit line over a traditional business loan.

No lump-sum debt commitment.

Traditional loans provide a fixed amount of money you have to repay with interest, whether you use the full balance or not. With a line of credit, you borrow only what you need, when you need it.

That means you’re not paying interest on unused money or stuck with debt you don’t need right away. This arrangement can help startups keep financing costs lower while still having access to capital for future needs. As a result, startups can reduce the risks of overborrowing and overspending.

Opportunity to build business credit.

An often overlooked perk of business lines of credit is their ability to help you build business credit. Lenders often report payment activity on credit lines to the business credit bureaus (like Experian, Equifax, and Dun & Bradstreet). Over time, paying on time and keeping your credit utilization low could improve your business credit score—possibly opening doors to better financing options later.

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A business credit line could be a fast, easy way for your startup to begin separating personal and business credit. Remember, keeping personal and business finances separate is essential for your company’s long-term stability.

Quick access to working capital.

Many business loans take days or weeks to fund. But some online lenders can approve and fund a business line of credit within a few days or less. And once you open a business credit line, you’ll have the ability to access funds as needed during your draw period (up to the credit limit on your account).Fast access to cash means you can act quickly when unexpected costs come up, like broken equipment or a time-sensitive investment opportunity. For new business owners juggling uncertainty, having access to instant working capital can be a major stress relief.

Cons of a business line of credit.

While the benefits of a business credit line are appealing for startups, founders should also consider the limitations of this type of financing before applying. 

Cost factors: rates, fees, and potential for overspending.

Business lines of credit typically feature variable interest rates, meaning that the APR you pay fluctuates based on market conditions. While this arrangement can work in your favor when interest rates drop, it also means that rates (and your payments) could increase unexpectedly.

On top of interest, lenders may charge:

• Annual fees
• Origination fees
• Draw fees (for each withdrawal)
• Late payment fees

It’s important to read the fine print before you sign any agreement. You should always calculate the total cost of borrowing upfront.

Because funds are so easy to assess, overspending is another risk to be aware of with business credit lines. As a startup, it’s important to be aware of this fact and treat your business line of credit like a financial tool, not extra cash.

Qualification barriers for startups.

New startups with limited credit history or inconsistent revenue may struggle to qualify for a business line of credit. Other startups might receive smaller credit limits or higher rates. Many lenders prefer borrowers to have at least six months of business history and a solid credit score before offering favorable financing terms.You might offset qualification challenges with collateral or a personal guarantee, but those options carry added risk. If your business can’t repay its debt, you could be personally responsible.

Short-term nature compared to other funding sources.

A line of credit is designed for short-term needs, not large-scale projects. So, if your startup needs funding for long-term investments (e.g., real estate, large equipment, etc.), a term loan or SBA loan might make more sense. 

Lender can reduce credit limit.

Another drawback to consider is the fact that lenders can reduce or freeze the credit limit on a business line of credit. If your business experiences financial setbacks or your credit score declines, you might experience this scenario. That’s why it’s important to maintain a strong financial foundation and diversify your funding sources.

Business line of credit vs. other startup financing options

Even if a business line of credit seems like a good fit, it’s smart to consider and compare other financing solutions. The right funding source for your business depends on your goals, timeline, and risk tolerance.

When a line of credit makes sense for startups

A business line of credit could be a good choice if your startup:

• Needs help managing cash flow gaps or seasonal slowdowns. 
• Wants flexibility to handle recurring or short-term expenses. 
• Plans to borrow small amounts of money and repay debt quickly. 
• Prefers to avoid long-term debt.
  

Consider the following scenarios. An Ecommerce startup might use a line of credit to stock up on inventory ahead of a holiday rush and repay the balance after sales post. Likewise, a new consulting firm might draw from its credit line to cover payroll while it waits for client invoices to clear. In both cases, access to revolving capital keeps business operations running smoothly without the burden of fixed-term debt.

Startup financing alternatives.

If a business line of credit doesn’t seem right for your startup, there are other ways to borrow. Below are more startup business loans that might work for your company instead.

1. Term loans

A business term loan provides a lump sum you repay over a fixed schedule. It’s a strong choice for long-term investments like expanding operations, purchasing equipment, or hiring staff. Payments stay consistent throughout the life of the loan, making budgeting easier.

2. SBA loans

The U.S. Small Business Administration (SBA) partially guarantees SBA loans. There’s less risk involved for the lender and borrowers receive improved access to capital. SBA loans typically feature longer repayment terms and competitive interest rates. These benefits often make https://www.lendio.com/blog/sba-loan-startup (provided applicants have steady revenue and detailed business plans to satisfy SBA lender requirements). 

3. Business credit cards

A business credit card could also work for new business owners who want a financing option to cover everyday expenses and small purchases. While credit limits are sometimes lower than business lines of credit, business credit cards may also offer rewards and help build credit. Just be mindful of higher interest rates if you carry a balance.

4. Equipment financing

Equipment financing can help you purchase machinery, tools, vehicles, or electronics while preserving cash flow. The equipment you finance serves as collateral for the loan. Repay the money you borrow in fixed monthly payments (plus interest) over a fixed term. 

5. Invoice financing

Another funding option that may work for certain startups is invoice financing. With this type of financing, you essentially sell your business’ outstanding invoices to secure working capital now. Terms vary, but you may be able to borrow up to 80% of your accounts receivables. 

Is a business line of credit right for your startup?

Whether or not a business line of credit is right for your startup depends on your goals, risk tolerance, and how you plan to use the funds. When you manage a credit line responsibly, it has the potential to help your new business maintain stability, cover short-term expenses, and build business credit. 

However, a business credit line isn’t ideal for every startup. If your funding needs are large, long-term, or growth-oriented, you might benefit from pairing a line of credit with another financing option (like a term loan or SBA loan). Explore the best startup lines of credit in the Lendio marketplace and apply today.

As a small business owner, you often have the difficult job of balancing opportunities with obligations. And if you use a business line of credit to help cover short-term expenses, manage seasonal slowdowns, or support growth, you know just how important maintaining a flexible business financing source can be. 

However, there may come a time when you need a change. Although your business may benefit from keeping an open credit line over an extended time, the original interest rate, fees, terms, or credit limit might not always be the best fit for your company’s needs. That’s where refinancing comes into play. 

When you refinance a business line of credit, it may be possible to lower borrowing costs, improve cash flow, and access additional working capital for new business opportunities. Yet before you refinance, it’s important to understand the process, including potential benefits and common pitfalls, to decide whether it’s the right move for your business.

Can you refinance a business line of credit?

It is possible to refinance a business line of credit, but not all borrowers will automatically qualify. Refinancing a credit line simply means taking out new financing, like a new business line of credit or even a business loan, and using it to pay off your existing debt. In general, the goal is to find a new financing solution that offers better terms than your current credit line, such as a lower interest rate, higher credit limit, or a better repayment structure.

Of course, it’s important to keep in mind that there are caveats when it comes to refinancing a business line of credit. Some lenders may restrict early refinancing or your financing agreement might include a prepayment penalty if you close a credit line before a certain date. You’ll also need to meet a new lender’s qualification requirements, including creditworthiness and annual revenue standards, to qualify. 

On the other hand, if your business credit score, personal credit score, or cash flow has improved since you first opened your line of credit, refinancing might be an easier task. With improvement in these areas (or others), you could be in a stronger position as a borrower to refinance and potentially secure better financing terms.

Is refinancing your business line of credit right for you?

Refinancing a credit line can sometimes be helpful, but it isn’t a one-size-fits-all decision. Before you make a switch, it’s wise to evaluate your current financing situation, business goals, and eligibility.

When refinancing makes sense.

Refinancing a business line of credit could be a smart move if: 

• Interest rates have dropped. 
• Your credit score has improved.
• You’re seeking a longer draw period or better repayment terms.
• You need access to more capital to support business growth or new projects.
• You want to consolidate multiple credit lines or business debt into a single account.

When refinancing might not help.

It may not be the right time to refinance a business line of credit if: 

• Your credit utilization ratio is high.
• Your credit score has declined. 
• Cash flow for your business is unpredictable. 
• Prepayment penalties may apply (and outweigh potential savings) if you refinance early.

Benefits and drawbacks of refinancing a business line of credit.

There are also pros and cons to consider before you refinance a business credit line. See the chart below for side-by-side comparisons you can use during the decision-making process.

Understanding risks and limitations.

Every financing decision involves trade-offs. For example, while a lower interest rate might reduce your monthly payment, a renewed (and therefore) longer overall repayment term could increase total interest costs over time. Likewise, switching lenders might cause a dip in your average age of credit history, potentially triggering a decrease in your credit score.

Before you move forward, calculate these variables. Then, make sure the projected savings from refinancing your credit line is the right strategy to support your long-term business goals.

How to prepare for refinancing: Key steps and requirements.

If you’re considering a business credit line refinance, preparation is key. Lenders will review your company’s financial health, repayment history, and risk profile before approving a refinance or any other type of new business financing. So, if you take time to strengthen your business’ financial position and creditworthiness before you apply, it may improve your approval odds and make your overall refinancing process smoother.

Below are details lenders typically review when you apply to refinance a business line of credit.

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• Business credit score: Lenders assess your credit profile to evaluate your ability to manage business debt responsibly. A higher credit score could unlock lower interest rates and better borrowing terms. 
• Annual revenue: Your company’s gross revenue helps lenders determine your repayment capacity. Lenders want assurance you can manage new business debt payments comfortably. 
• Cash flow: Consistent cash flow indicates stability and demonstrates an ability to meet financial obligations like debt payments, payroll, and operating expenses.
• Collateral: If you apply for a secured business line of credit or a secured business loan, you’ll need to provide assets to back the loan (e.g., real estate, equipment, or receivables). Unsecured credit lines don’t require collateral.‍
• Time in business: Some lenders prefer businesses to have at least one or two years of operational history. However, companies with six months or more in business may be eligible for a startup business line of credit.

After reviewing these factors, take the time to address possible weak points. For example, improving your credit or increasing your working capital might put you in a better position for approval.

Navigating the application process for a refinance.

Once you’re ready to move forward, it’s also helpful to understand what to expect when you apply for a refinance. The process can vary slightly from one lender to another, but here’s a general idea of what you might experience.

1. Review your current loan agreement.

Before applying with another lender, review your existing loan terms. Take time to understand fees, rate structures, and prepayment penalties in your current financing agreement. These details can help you make informed decisions when you evaluate new financing offers. 

2. Assess your financial health.

Check your business credit, personal credit, and recent financial statements. Pay down debt balances (especially business credit card balances) whenever possible. Most of all, pay on time to protect your credit score.

3.  Determine your refinancing goals.

Identify your top priorities for refinancing, like lowering your interest rate, consolidating debt, or increasing your credit limit. Clear financial goals make it easier to sort through offers and choose the best financing solution for your business. 

4. Gather key documentation.

Most lenders require you to provide financial statements, tax returns, and bank statements when you apply for a new credit line or other types of business financing. So, it’s wise to prepare these documents in advance to help speed up the application and underwriting process.

5. Compare lenders and offers.

Request financing quotes from multiple lenders, including online lenders, banks, and SBA loan programs (depending on your borrowing needs). Once you receive quotes, compare interest rates, repayment terms, and fees carefully to find the best fit for your company. 

6. Submit your refinance application.

After you select the best credit line or business loan for your needs, complete your new lender’s application with accurate details and supporting documents. If the lender asks for any additional information, be sure to respond promptly to avoid potential delays.

7. Review approval terms.

Once a lender approves your application, read through the final loan agreement carefully. Confirm the new interest rate, fees, repayment term, and any collateral requirements before signing. 

8. Close and receive funds disbursement.

After closing, your lender pays off the existing credit line or disburses funds so you can do so. If you’re opening a new credit line, be sure to activate your new account and confirm access. With any type of credit, be sure to make your new payments according to the terms of your financing agreement to avoid problems and (hopefully) continue building positive business credit history for the future.

Maximizing benefits and avoiding pitfalls post-refinance.

After refinancing, use your new business line of credit strategically. If you’ve secured a lower interest rate or reduced fees, you can use the savings to reinvest in business growth—perhaps through equipment purchases, operational expansion, or improved cash flow management.

It’s also important to keep your credit utilization ratio low and make all monthly payments on time to maintain a healthy business credit score. Consider setting up automatic payments to avoid missed due dates that could affect future financing opportunities.

Finally, avoid the temptation to take on unnecessary new loans or additional debt. A refinance has the potential to optimize your company’s finances. But it’s essential to manage the refinance process with discipline and a clear growth plan to avoid potential setbacks.

Next steps.

Refinancing a business line of credit can be a smart move, as long as you’re doing it for the right reasons and you manage the process carefully. By securing lower interest rates, better terms, or a higher credit limit, you can improve cash flow and reduce borrowing costs. And either of these scenarios could give your business more flexibility to grow.

Before you commit to refinance a business line of credit, however, it’s essential to evaluate your full financial picture. You also want to compare multiple business financing options. With a little preparation and the right lender, refinancing a business line of credit could transform your business financing strategy and better position your company for long-term success.

A strong business credit profile can open doors to better financing, lower interest rates, and higher credit limits. Yet many small business owners don’t realize they can use a business line of credit to help establish or strengthen their company’s credit history. 

A business line of credit provides flexible access to funds for short-term expenses and can also play a key role in showing lenders that your company manages credit responsibly. Of course, it’s important to use your business line of credit wisely—only borrowing what you can afford and making consistent, on-time payments. If you maintain these good habits, you can use your credit line to steadily improve your business credit score over time. The following guide explains how business credit works. Learn how a line of credit can fit into your credit-building goals and the best ways to boost your company’s credit profile over time.

Understanding business credit and lines of credit.

Before you use a line of credit to build your company’s credit profile, it’s important to understand two key details: how business credit works and how a line of credit functions. Many small business owners focus on personal credit when they apply for financing, especially during the startup phase. In fact, a recent survey from the Federal Reserve found that 86% of small employer firms use personal credit to obtain financing.

Yet lenders often evaluate business credit as well when you seek certain types of capital. Working to establish good credit for your business can protect your personal credit and open the door to more funding opportunities for your company.

What is business credit?

Business credit is data that others can use to measure how reliably your company handles its debt and financial obligations. Lenders, suppliers, insurers, and even potential partners may review your business credit profile to perform risk assessments before extending financing or terms to your company. 

Unlike personal credit, business credit has a direct connection to your company’s name and Employer Identification Number (EIN). Some of the most common business credit scores come from developers like Dun & Bradstreet, Experian Business, and Equifax Business.

Business credit scores often weigh factors such as payment history, length of credit history, company size, years in business, and credit utilization. Yet before your business can build a credit score, it must establish credit accounts (often called tradelines) in the company’s name.

A healthy business credit score may help your company:

• Qualify for lower borrowing costs and better insurance premiums. 
• Access higher credit limits to support growth.
• Receive more favorable payment terms from vendors and suppliers.

How a business line of credit works.

A business line of credit is typically a revolving credit account, similar to a business credit card. Your lender approves you for a credit limit, and you draw the amount of money you need to cover cash flow gaps, inventory purchases, unexpected repairs, or other expenses. As your business repays the cash it borrows, the funds become available again to reuse throughout the draw period on your account.

Key features of business credit lines include:

• Revolving access: Borrow, repay, and reuse your credit line as needed.
• Variable interest: Line of credit interest rates often track market benchmarks, like the Prime Rate or the Secured Overnight Financing Rate (SOFR).‍
• Flexible use: Use to cover short-term expenses, seasonal costs, or unexpected repairs.

Why responsible use matters.

Good borrowing habits (like consistently paying your credit line on time), can demonstrate to lenders that your company manages credit responsibly. These behaviors influence your business credit scores and may help you qualify for better rates and terms in the future. When you use it strategically, a business credit line not only can meet your working capital needs, but may also become a stepping stone toward future opportunities.

Steps to building business credit with a line of credit.

Using a business line of credit strategically can strengthen your company’s financial foundation over time. But your results depend on several factors, including how you prepare before you apply and how you manage the account once it’s open. Follow the steps below to give your business the best chance of qualifying for a credit line and using your new account as an effective credit-building tool.

Step 1: Prepare to apply and strengthen your eligibility.

Before you apply for a business line of credit, make sure your business is ready. Lenders typically review your company’s legal status, finances, and credit history before approving new financing applications. Preparing in advance could improve your chances of approval and show lenders that you operate professionally. Key tasks to prepare for your application:

• Register your business legally. Make sure to register your company as an LLC, corporation, or other legal entity with your state so it can build credit in its own name.
• Apply for an Employer Identification Number. Obtaining an EIN from the IRS lets lenders and business credit bureaus track your company’s financial activity separately from your personal finances. 
• Open a business bank account. Maintaining a separate business bank account helps you keep personal and business finances separate. ‍
• Organize financial documents. Gather essential documents like financial statements, recent tax returns, and cash flow reports for upcoming lender applications.

Step 2: Apply for a business line of credit.

Shop around for lenders that offer credit lines suited to your company’s credit profile, size, and borrowing needs. When you compare financing offers, pay attention to details such as: 

• APR 
• Fees (annual, draw, and maintenance)
• Credit limits
• Repayment flexibility
• Qualification requirements (e.g., minimum credit score, time in business, annual revenue, etc.)

Once you choose the credit line that works best for your business, submit a complete application with accurate documentation. Some lenders may require a personal guarantee or collateral if you’re applying for a secured business line of credit. These requirements might be more common if your business is new or has limited credit history.

Tip: Ask lenders if they report to business credit as part of their program. Many lenders do, but some do not. The majority of lenders who offer lines of credit in the Lendio Marketplace report to Experian, Equifax, or Dun & Bradstreet, which can help you build your business credit history!

Step 3: Use the line of credit responsibly.

Treat your business line of credit as a strategic tool rather than an open checkbook. Make a habit of borrowing only what you need for short-term expenses that support business growth. It’s also important to track each draw and manage spending to avoid overutilization. Using a high percentage of your credit limit could increase your credit utilization ratio and might damage your credit score until you pay down the balance on your credit line. When it comes to credit utilization, lower is better.

Step 4: Make on-time, consistent payments.

Your payment history carries the most weight when you’re building business credit. Pay at least the minimum amount due each month. Consistently paying on time (or even early) can help your credit score and save you money on interest charges. If possible, set up automatic payments to reduce the risk of missing a due date. When cash flow allows, making extra payments could lower your debt faster and improve your credit utilization ratio as well.

Before you apply, it helps to get an idea of what to expect when it comes to line of credit payments. Use our business line of credit calculator to get an idea of what monthly payments, interest, and terms could look like!

Optimizing impact on business credit score.

Next, aim to optimize how your credit line is impacting your business credit score. In other words, find out how to make every draw and payment count—not just from a financial point of view, but from a credit-building perspective, too.

Below are a few helpful strategies, business credit score factors, and pitfalls to understand.

Key credit score factors.

Different credit scoring models consider different data when calculating your business credit score. With your PAYDEX® Score, for example, past payment performance determines the score your business earns on a scale of 1 and 100. Other business scoring models may also consider a wider range of details. While business scoring models differ, the following factors commonly carry weight:

By understanding the credit score factors above and working to manage your credit line according to these details, you put yourself in a better position to earn and maintain good business credit over time.

Pitfalls to avoid when using a line of credit.

It’s also important to avoid common mistakes when you open a business line of credit, such as the following.

• Maxing out your credit line: High utilization could hurt your credit score, even if you pay on time. 
• Late payments: Any delinquencies (especially missed payments) could cause significant credit score damage. 
• Neglecting credit reporting: If your lender or vendor doesn’t report your account to the business credit reporting agencies, your positive payment history won’t count. Look for lenders that share data with one or more of the business credit bureaus. 
• Frequent hard credit inquiries: Applying for too many credit lines in a short period could damage your credit score. So, choose your preferred new account before filling out any financing applications.‍
• Closing your account too early: This decision could cause you to lose the benefit of an active, longer credit history (depending on the scoring model).

Bottom line.

A business line of credit has the potential to serve as both a flexible funding tool and a credit-building asset. So, prepare well, choose the right lender, borrow responsibly, and stay disciplined with payments to set your business up for the best chance of success. If you follow this path, you have a better chance of strengthening your company’s financial foundation and improving its credit profile at the same time.

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Healthcare professionals face high startup costs in the form of office space, equipment, staff, insurance, and more. In 2023, typical startup costs for a small medical practice ranged from $100,000 to $500,000.

But while traditional financing used to be the way to go, SBA loans may be the better option. They offer the flexibility and funds needed to launch, expand, or stabilize medical practices.

Here’s how SBA loans can help with clinic startup financing for doctors, dentists, and other medical professionals.

SBA loans in healthcare: The basics

SBA loans are designed to help small businesses, including private clinics and dentists, with their financing needs. The U.S. Small Business Administration (SBA) guarantees between 50% and 90% of these loans, so lenders are often more willing to work with newer medical practices.

These loans typically have lower rates, longer terms, and greater flexibility in funds usage than traditional financing. These are the most common SBA loans for medical practices.

SBA 7(a)

The SBA 7(a) loan is the SBA’s most versatile financing solution for small businesses. Standard 7(a) loans range from $350,001 to $5 million. Funds can be used for practice acquisition, medical equipment, short- and long-term working capital, and debt refinancing.

These SBA loans have flexible repayment terms—10 years for general use, 25 years for real estate. This makes them a solid option for medical practitioners with ongoing financing needs or plans for future expansion.

Two other loan programs worth considering are:

• 7(a) Small Loans—Loans are for $350,000 or less. Collateral may be required for loans above $50,000.
• 7(a) Express Loans—These are revolving lines of credit that last up to 10 years and cap out at $500,000. They're especially useful for immediate needs, like payroll and equipment repair.

SBA 504

SBA 504 loans are geared toward the purchase of major fixed assets, such as real estate or large medical equipment. Funds can also be used to improve existing facilities or land, as well as consolidate or refinance qualified debt. They can't be used for inventory or working capital.

These loans come with 10- or 25-year repayment terms and typically cap out at $5.5 million.

SBA Microloans

SBA microloans cap out at $50,000, but typically have less stringent requirements. Medical professionals may apply for a microloan through a qualified nonprofit, community-based organization.

These loans are particularly useful in clinic startup financing because of their flexibility. They can be used for medical equipment, inventory, supplies, minor renovations, and working capital. They’re not meant for debt repayment or real estate.

Key ways medical professionals use SBA loans.

Whether you’re a dentist or other medical professional, here’s how SBA loans could help your business.

Advantages of SBA loans for clinics and dentists.

SBA loans can be crucial to launching and scaling your business, or even making strategic acquisitions. While it’s important to choose the right program, SBA loans offer many advantages to dentists and other medical professionals, including:

• Lower interest rates compared to conventional business financing
• 10- to 25-year repayment periods
• Ability to finance both big-ticket items and ongoing operations
• Builds long-term financial stability for medical practices
• Partial government guarantee means less strict financing requirements

Considerations before applying for an SBA loan.

Consider the following before applying for an SBA loan for your medical practice:

• Documentation demands—You’ll typically need tax returns, cash flow statements, other financial statements, and a clear business plan
• Approval timelines—It may take longer to secure funds (five to 10 business days for SBA 7(a) loans) compared to other financing
• SBA guarantee fees—Borrowers may have to pay an upfront fee when taking out an SBA loan (fees are a percentage of the of the guaranteed portion of the loan)

Dental and medical practices face unique demands that other businesses don’t. For example, insurance claims can take time and lead to cash flow delays. Be prepared to demonstrate steady patient demand and insurance reimbursement flow.

Eligibility checklist.

Any form of clinic startup financing, including SBA loans, have their requirements. While every loan program and lender operates a little differently, these are the big ones:

• 650+ personal credit score (165+ SBSS score)
• At least two years in business (or strong startup plan for new practices)
• Proof of sufficient revenue for loan repayment
• For-profit business located in the U.S.
• Proof of licenses, credentials, and regulatory compliance
• Clear loan purpose (like equipment financing, expansion, or debt refinance)
• Down payment or collateral (in some cases)
• Proof of business equity
• Guarantor or co-signer (helps those with a lower credit score or less time in business)

Ultimately, SBA loans can be key to sustainable growth for private clinics and dental practices. These loans allow medical professionals to launch a startup, expand their services, or even merge with an existing practice—all while managing costs effectively and responsibly.

Are you a healthcare professional thinking about using an SBA loan in your practice? Find funding through Lendio’s marketplace today.

Trucking and logistics businesses are the backbone of the U.S. economy. Demand for these services is high, but growth isn’t always easy.

From buying new trucks to upgrading critical technology, expansion often requires large upfront investments. With the cost of fuel, fleet maintenance, and payroll keeping margins thin, growth can feel nearly impossible without reliable access to capital. An SBA loan may make it easier to scale without draining the cash you need for day-to-day operations.

What are SBA loans?

SBA loans are government-backed loans designed to support small businesses. They’re issued through banks, credit unions, and other approved lenders and partially guaranteed by the U.S. Small Business Administration. This guarantee lowers risk for lenders, which allows them to offer better terms for borrowers. Compared to traditional loans, SBA loans often have lower interest rates, longer repayment periods, and more lenient qualification requirements.

Here are some of the most common SBA loans for trucking and logistics companies.

SBA 7(a) loan

The SBA 7(a) loan is the most commonly used SBA program and is also the most versatile. It can be used for a wide range of business needs, including:

• Commercial truck financing
• Covering day-to-day operations
• Refinancing existing debts
• The cost of adding routes or expanding into new regions

Loan amounts go up to $5 million, with a repayment period of up to 10 years for most uses.

SBA 504 loan

The SBA 504 loan is designed for financing long-term assets, primarily real estate and large equipment. Trucking and logistics companies may use this loan for:

• Purchasing terminals, distribution centers, garages, or other commercial properties
• Making major fleet upgrades
• Purchasing warehouse equipment
• Major facility improvements

504 loans are structured as a partnership between a traditional lender and a Certified Development Company (CDC), which is a nonprofit organization approved by the SBA to support local economic development. The borrower typically makes a 10% down payment, the CDC covers 40%, and the lender finances the remaining 50%. Repayment periods can stretch up to 25 years, and interest rates are typically fixed.

SBA microloan

An SBA microloan is available for amounts up to $50,000, making it more appropriate for smaller funding needs. It’s often used by startups or growing businesses that are not yet able to qualify for larger loans. These funds can be used for expenses such as:

• Equipment repairs
• Safety upgrades
• Insurance costs
• Marketing expenses
• Working capital

Microloans are issued by nonprofit lenders. Terms vary by lender, but repayment terms often stretch up to six years. While the maximum loan amount is smaller, it’s often easier to qualify, making this more accessible than traditional loans.

Smart ways trucking companies use SBA loans to grow.

Due to the longer terms and lower interest rates, many companies use SBA loans to cover ongoing operational needs, rather than simply bridging a cash flow gap. These loans can also help business owners make strategic decisions and invest with greater confidence.

Here are some of the most effective ways transportation companies use SBA loans:

• Fleet expansion: Buying or leasing new trucks to keep up with demand
• Maintenance and repairs: Covering the cost of repairs, upgrades, and replacement parts to keep your fleet operational and compliant
• Fuel costs: Providing the working capital needed to manage spikes in fuel prices.
• Technology upgrades: Investing in GPS systems, electronic logging devices (ELDs), route optimization software, or other logistics platforms
• Staffing needs: Covering the cost of hiring and onboarding new drivers, dispatchers, and back-office support, and keeping up with ongoing payroll obligations

Using SBA loans for both short-term operations and long-term expansion can help companies grow without sacrificing stability.

Benefits of SBA loans for logistics businesses.

SBA loans are one of the most accessible forms of logistics business funding, with terms that often align with the financial demands of running a trucking company. Here are a few of the key advantages.

Lower interest rates.

SBA loans are typically offered at lower rates than conventional loans. Since trucking and logistics companies often need larger loans, the savings can add up quickly.

Lower repayment terms.

It’s common for SBA loans to offer repayment terms of up to 10 years for equipment and working capital, and up to 25 years for real estate. This can make payments more affordable, allowing companies to invest in long-term growth without straining the operations budget.

Flexible use of funds.

While some conventional loans restrict the use of funds, SBA loans are designed for use across multiple parts of a business. For example, one loan could cover the cost of financing semi-trucks, meeting payroll obligations, and investing in compliance technology. This flexibility makes SBA loans especially practical for logistics companies that may have shifting priorities.

Positive impact on credit history.

SBA loans are often more accessible than traditional loans, so companies may get approved even with less-than-perfect credit history. Once the loan is in place, making consistent, on-time payments may help strengthen your business profile. Over time, a stronger credit history may create opportunities for larger financing opportunities or better terms on future loans.

Financial stability in a volatile market.

From fuel to insurance, many of the costs associated with trucking and logistics can fluctuate significantly. SBA loans provide predictable, long-term funding that may help keep business afloat when markets shift. Having financing in place reduces pressure during volatile periods.

How to qualify for an SBA trucking loan.

Getting approved for an SBA loan requires preparation. While each lender has its own criteria, most require the following criteria:

• Credit score: Typically 650 or higher
• Time in business: At least two years, though startups may qualify with a solid plan
• Revenue and cash flow: Ability to prove you can afford loan repayment
• Compliance: A clean record with Department of Transportation (DOT) and industry regulations

You may be able to strengthen the chance of approval by preparing up-to-date financial forecasts, strengthening your business plan, and showing steady demand. Completing an online fundability assessment can help you understand how likely your business is to qualify for financing, and additional steps that may help improve your standing.

Find the right loan for your trucking business.

Lendio’s marketplace provides access to both SBA lenders and alternative financing options with a single application. Compare your options to find the best fit for your business. For non-SBA products, you may secure funding in as little as 24 hours.

A business line of credit can be a lifeline for small businesses that need access to flexible working capital. But before you apply for financing or draw your first dollar, you need to understand how interest rates affect your borrowing costs.

Rates on business lines of credit vary widely depending on the lender, your credit profile, and the structure of the credit line itself. Knowing the details that impact these rates can help you compare financing offers with confidence.

The following guide breaks down how lenders set rates on business lines of credit and what interest rate ranges you can expect in 2025. Plus, learn how different types of credit lines compare and key steps you can take to position your business for more competitive borrowing offers.

Understanding business line of credit interest rates.

A business line of credit works much like a revolving business credit card, giving you flexible access to cash on an as-needed basis. You can borrow up to your approved credit limit, repay the debt, and borrow again throughout the draw period (as long as the credit line remains open and in good standing). 

Like credit cards, several details combine to determine how much you pay to borrow money with a business line of credit, including your outstanding balance. However, the primary factor that influences potential borrowing costs is your interest rate.

Interest rates on business lines of credit vary. Lenders consider several factors when evaluating your application—both to determine if you qualify for a business line of credit and to decide how much to charge you. Understanding these details can help you compare financing offers for your business more effectively.

Key components that shape business line of credit interest rates.

1. Base rate: Most lenders use a benchmark rate like the Prime Rate or the Secured Overnight Financing Rate (SOFR) as the starting point for pricing credit lines. 

2. Risk-based markup: Your personal credit scores, business credit scores, revenue, cash flow, time in business, and other factors affect how much margin a lender may add on top of the base rate. The higher the lender believes your borrowing risk to be, the higher the markup.

‍3. Fees: Annual fees, draw fees, inactivity fees, and sometimes even maintenance charges can increase your overall borrowing costs, even when the advertised interest rate looks competitive. That’s why it’s important to review both the APR and the fee schedule.

Types of business lines of credit and their rate structures.

The type of business line of credit you apply for also influences the interest rates lenders may offer you. Understanding these differences can help you select the most affordable (and best suited) financing option for your company.

Why secured vs. unsecured matters.

Lenders view secured lines of credit as less risky because they have collateral to claim if a borrower defaults on their debt. That lower risk for the lender often translates to lower interest rates for the borrower. For example, if your business pledges $50,000 of inventory as collateral, you might qualify for a lower rate on a business line of credit compared to a business seeking the same credit limit without any assets to secure the loan. 

Unsecured lines of credit, on the other hand, shift all risk to the lender. The borrower has no “skin in the game,” although the lender may still require a personal guarantee. Without collateral, the lender will often charge a higher rate to compensate for the additional risk.

Revolving vs. non-revolving credit lines.

A revolving credit line functions much like a business credit card. This financing structure is the most common business line of credit. As you pay down your balance on a revolving line of credit, you free up available credit that you can borrow against again during the draw period on your account. Because the interest rate on these accounts often track a benchmark rate, like the Prime Rate or SOFR, your borrowing costs can rise or fall with market conditions. 

A non-revolving line of credit acts more like a business term loan. Once you draw the funds, you can’t access the credit line again. Instead, if you need more capital for your business, you’ll need to reapply for funding (and likely pay off the money you already borrowed first). Some non-revolving products may feature a fixed rate or an interest-only repayment option while others offer variable interest rates. So, it’s important to pay attention to the financing terms to make sure you understand the cost. These structures can be helpful for one-time large expenses, like seasonal inventory or equipment upgrades.

Comparing business lines of credit rates: Benchmarks and what to expect.

Business owners may shop for a line of credit because they need flexible access to capital. Yet comparing offers without understanding interest rates can lead to higher borrowing costs than expected. In 2025, lenders continue to base most credit line pricing on market benchmarks and their own risk policies. If you know how these pieces fit together, it can help you better predict your own financing costs and potentially negotiate better terms.

Average interest rates and what drives them.

Most lenders tie the interest rates they offer on business lines of credit to a benchmark, such as the Prime Rate or the Secured Overnight Financing Rate (SOFR). Because of this arrangement, when the benchmark rate rises, your borrowing cost increases as well. Likewise, if the benchmark falls, you pay less. That’s the nature of a variable interest rate.For well-qualified borrowers, current rates on business lines of credit often start in the low double digits. Newer businesses or applicants with weaker credit may see APRs climb into the high-20% range. Lenders may adjust the interest rate they offer you after reviewing factors such as:

• Creditworthiness: Lenders reward strong business and personal credit scores. For example, a good FICO® Score (670 or higher) may help you unlock lower APRs.
• Revenue and cash flow: Steady revenue and a dependable cash flow signals to lenders you can repay debts on time and can often bring down your interest rate.
• Loan size and term: Larger credit limits or longer repayment periods add risk for lenders. So, you might face a higher interest rate if you’re looking for either of these features in your line of credit. ‍
• Collateral: If you pledge assets such as inventory or receivables, lenders often offer a lower APR than they would on an unsecured credit line.

Even if two businesses applied to the same lender on the same day, they would each likely receive very different financing offers because of these variables. 

Why line of credit rates vary across lenders.

Another detail that can impact the interest rate you pay on a line of credit is where you apply for financing. Banks, online lenders, and SBA-backed programs each evaluate risk in different ways.

• Banks and credit unions: Traditional financial institutions usually advertise the most competitive starting APRs for established businesses with strong credit and collateral. But these lenders often require extensive documentation and loan processing timelines can be lengthy. 
• Online lenders: If you’re looking for faster funding options or more flexible minimum borrowing criteria, you may want to consider applying for a line of credit from an online lender. However, online lenders may also charge higher APRs to offset the added risk. ‍
• SBA-backed credit lines: Both traditional and online lenders offer SBA lines of credit, like SBA CAPLines, SBA Express Lines of Credit, and other options. SBA interest rates are typically competitive, but paperwork and approval can be time consuming.

It’s wise to compare several lenders to find the best combination of cost, speed, and qualification requirements to fit your business borrowing needs.

Typical rate ranges by business profile.

Here’s what many small businesses can expect to pay in 2025. The following numbers represent typical APR ranges, though individual offers may differ based on the factors above and on current market conditions.

Understanding how lenders set rates and how your business profile affects pricing could save you thousands of dollars over the life of your credit line. When you estimate the payments on a business line of credit, it’s eye opening to discover that even a two-percentage point difference in APR on a $50,000 balance could cost thousands of dollars in extra interest each year. Before you apply, review your credit, cash flow, and collateral to strengthen your borrowing profile.

Assessing offers and choosing the right business line of credit. 

After you understand rate ranges for business lines of credit, it’s wise to compare financing offers beyond just the advertised APR. Look beyond the cost and evaluate other key features like repayment flexibility to make sure the credit line fully supports your business borrowing needs.

Key details to compare

When you review multiple offers, focus on the following core details. 

1. APR and fees: Consider the full cost of borrowing, including APR and all lender fees (annual, draw, maintenance, etc.).
2. Repayment terms: Understand draw period length, repayment schedules, and whether your rate is fixed or variable. 
3. Flexibility: Make sure the credit limit and repayment structure are a good match for your seasonal or ongoing borrowing needs. ‍
4. Qualification criteria: Confirm minimum borrowing requirements including credit score, time in business, financial history, and other relevant risk factors.

Key questions and warning signs to consider.

Before you choose a line of credit for your business, it’s also important to ask lenders key questions to avoid surprises.

• How often do you adjust variable rates, and how will you notify me about rate changes? 
• What happens if I want to renew or increase my credit limit in the future? 
• Do you charge any fees for early repayment or inactivity? 
• Will you charge additional fees if I draw funds frequently or in small amounts? 

‍

Also, watch for red flags like unclear fee schedules, confusing repayment terms, or high penalty charges for inactivity or early payoff. A reputable lender should provide you with a transparent breakdown of all costs and straightforward answers to your questions. 

Improving your business’s eligibility for better rates.

Lenders reward borrowers who are well prepared, demonstrate creditworthiness, and financial stability. As a result, if you make an effort to strengthen your application before you apply, you may increase your chances of accessing more competitive interest rates.

Steps to improve your borrower profile

1. Improve your credit. Pay down revolving credit card debt, resolve delinquencies, and review your credit reports for errors to improve your credit score.

 2. Organize your finances. Gather key documents such as financial statements, tax returns, balance sheets, and cash flow reports and have them ready for lender review.

‍3. Build relationships with lenders. A history with your bank, credit union, or an existing lender could work in your favor when you apply for new financing. 

‍4. Consider collateral. If you have inventory, receivables, or equipment to pledge, those assets may help you secure a lower interest rate.

‍

Taking the steps above can demonstrate lower risk to lenders which often translates to better pricing and terms.

Leveraging creditworthiness and financial practices.

Your financial history plays a major role in how lenders assess risk when you apply for financing (whether a business line of credit or other types of business loans). Lenders typically look at your personal and business credit scores, annual revenue trends, and overall debt figures. They also want to see a clear business plan that outlines how you’ll use the credit line and repay it. 

Building a solid relationship with lenders is another long-term strategy that may strengthen your borrowing position—especially for businesses seeking long-term financial relationships. Consider providing regular updates about your financial performance, sharing growth plans, and maintaining open communication to build trust over time. When you demonstrate consistent repayment habits and strong financial practices, lenders may respond with better terms and lower rates.

Bottom line.

A business line of credit may help your company manage cash flow, cover seasonal costs, and take advantage of new opportunities. But the interest rate you secure plays an important role in how valuable that financing will be for your company over the long term. If you want to find the best financing available for your business, take the time to compare offers beyond the advertised APR. Review each lender’s full cost structure, repayment terms, and qualification criteria. And if you need to earn better terms, be sure to gather documentation, strengthen your credit profile, or offer collateral before you apply. The work you put in upfront could add up to meaningful savings over time.

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

Current SBA rate maximums range from 10.25% to 15.25%.

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

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

How SBA loan interest rates work.

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

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

• Prime rate: The most commonly used rate, currently at 7.25%
• Optional peg rate: Updated quarterly by the SBA based on market conditions, currently 4.75%

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

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

Current SBA loan rates (October 2025).

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

SBA 7(a) loan rates

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

SBA 7(a) rates range from 3% to 8% above the base rate. Use the following table to compare rates for different loan sizes and term lengths. The current (October 2025) Wall Street Journal Prime Rate is 7.25%.

Historical Prime rates

SBA 504 loan rates

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

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

Historical U.S. Treasury rates

SBA Microloan loan rates

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

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

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

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

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

SBA Express loan rates

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

SBA Community Advantage loan rates

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

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

Typical SBA loan fees

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

Upfront fee on SBA 7(a) loans

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

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

Apply with Lendio today!

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

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

What is an SBA 7(a) loan?      

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

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

Are all SBA loans 7(a) loans?

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

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

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

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

Loan proceeds may not be used to:

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

Types of SBA 7(a) loans

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

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

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

Standard 7(a) loan

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

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

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

7(a) small loan

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

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

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

SBA Express loan

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

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

7(a) Export Trade Finance

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

Export express loan

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

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

Export working capital loan

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

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

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

International trade loan

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

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

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

7(a) CAPLines

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

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

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

Working Capital CAPLine

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

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

Contract CAPLine

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

Builders CAPLine

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

Seasonal CAPLine

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

7(a) Working Capital Pilot (WCP) Program

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

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

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

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

Eligibility requirements for SBA 7(a) loans

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

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

SBA 7(a) loan terms

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

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

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

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

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

SBA 7(a) loan rates

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

Current SBA loan interest rates are tied to the prime rate, which can be fixed or variable. As of October 6, 2025 the prime rate is 7.25%. The SBA allows lenders to add a markup, but caps how high the rate can go.

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

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

SBA 7(a) fees                            

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

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

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

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

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

How to apply for an SBA 7(a) loan                     

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

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

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

Alternatives to SBA 7(a) loans

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

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

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

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