SBA loans are government-backed loans offering lower rates and longer terms than conventional business loans. This comprehensive guide covers all SBA loan programs, eligibility requirements, and how to maximize your approval chances.
SBA Loan Overview 2025
- Loan amounts: $500 - $5 million (depending on program)
- Interest rates: Prime + 2.25% to Prime + 4.75%
- Terms: Up to 25 years (real estate), 10 years (equipment)
- Down payment: 10-20% typical
- Approval time: 30-90 days
Types of SBA Loans
| Program | Max Amount | Best For | Terms |
|---|---|---|---|
| SBA 7(a) Loan | $5 million | General business purposes | Up to 25 years |
| SBA 504 Loan | $5.5 million | Real estate & equipment | 10-25 years |
| SBA Microloan | $50,000 | Startups, small needs | Up to 6 years |
| SBA Express | $500,000 | Quick funding needs | Up to 25 years |
| SBA Disaster Loans | $2 million | Disaster recovery | Up to 30 years |
Detailed Loan Program Breakdown
MOST POPULAR
SBA 7(a) Loan
- Maximum: $5 million
- Interest rates: Prime + 2.25% to 4.75%
- Terms: 10 years (working capital), 25 years (real estate)
- Use: Working capital, equipment, real estate, refinancing, acquisitions
- Down payment: 10-20%
- Guarantee: SBA guarantees up to 85%
REAL ESTATE
SBA 504 Loan
- Maximum: $5 million - $5.5 million
- Structure: 50% bank, 40% CDC (SBA), 10% borrower
- Interest rates: Fixed rate on SBA portion
- Terms: 10 years (equipment), 20-25 years (real estate)
- Use: Commercial real estate, major equipment
- Benefit: Lower down payment, fixed rates
STARTUPS
SBA Microloan
- Maximum: $50,000 (average: $13,000)
- Interest rates: 8-13%
- Terms: Up to 6 years
- Use: Working capital, inventory, supplies, equipment
- Benefit: Easier approval, good for startups
- Note: Cannot use for real estate
SBA Loan Requirements
Business Requirements
- For-profit business: Operating in the U.S.
- Size standards: Meet SBA small business definition
- Good standing: No outstanding tax liens or defaults
- Use of funds: Must be for approved business purposes
- Owner equity: Reasonable investment in the business
Personal Requirements
- Credit score: 650+ recommended (680+ preferred)
- No recent bankruptcy: Generally 3+ years
- No criminal history: Felonies may disqualify
- Personal guarantee: Owners with 20%+ must personally guarantee
- Collateral: May be required for larger loans
SBA Loan Interest Rates 2025
| Loan Type | Loan Amount | Maximum Rate |
|---|---|---|
| 7(a) Variable | $50,000+ | Prime + 2.25% - 2.75% |
| 7(a) Variable | Under $50,000 | Prime + 3.25% - 4.75% |
| 504 (SBA portion) | All amounts | Fixed at ~5-6% |
| Microloan | Up to $50,000 | 8% - 13% |
| Express | Up to $500,000 | Prime + 4.5% - 6.5% |
How to Apply for an SBA Loan
- Assess eligibility: Ensure you meet basic requirements
- Gather documents: Financial statements, tax returns, business plan
- Find a lender: SBA-approved bank, credit union, or online lender
- Complete application: SBA Form 1919 and lender requirements
- Submit & wait: Processing typically 30-90 days
- Close loan: Sign documents, receive funding
Required Documents
- Business and personal tax returns (3 years)
- Financial statements (balance sheet, income statement)
- Business plan with projections
- Bank statements (3-6 months)
- Business licenses and registrations
- Lease agreements or property documents
- Personal financial statement (SBA Form 413)
- Resume/background for owners
Top SBA Lenders 2025
- Wells Fargo: Largest SBA lender by volume
- Huntington National Bank: Strong in 7(a) loans
- Live Oak Bank: Online SBA specialist
- Celtic Bank: Wide range of industries
- Newtek Small Business Finance: Technology-focused
- TD Bank: East Coast focus
Tips for SBA Loan Approval
- Build credit: 680+ personal credit score ideal
- Reduce debt: Lower debt-to-income ratio
- Prepare documentation: Complete, organized records
- Show cash flow: Demonstrate ability to repay
- Have collateral: Increases approval odds
- Write solid business plan: Clear use of funds
- Work with SBA-experienced lender: They know the process
SBA Loans vs Other Financing
| Factor | SBA Loan | Bank Loan | Online Lender |
|---|---|---|---|
| Interest Rate | 6-10% | 5-12% | 10-50% |
| Approval Speed | 30-90 days | 30-60 days | 1-7 days |
| Loan Terms | Up to 25 years | 5-10 years | 6 months - 5 years |
| Down Payment | 10-20% | 20-30% | Often none |
| Qualification | Moderate | Strict | Easier |
FAQ
Can startups get SBA loans?
Yes, but it's harder. Microloans are most accessible. For 7(a), you'll need strong credit, industry experience, and often collateral.
How long does approval take?
Typically 30-90 days. SBA Express can be faster (36 hours for SBA approval, though lender may take longer).
What credit score is needed?
Most lenders want 650+, with 680+ preferred. Some online SBA lenders accept lower scores.