SBA Loan Programs : Find the Best Loan for Your Clients' Business
The Small Business Administration (SBA) offers multiple SBA loan programs, which can make finding the right loan for your clients' business is a challenge. You can use some loans for general business financing, while other loans, like the SBA 504 loan, are specifically for financing major fixed assets. Understanding your clients' needs can help match you with the right SBA business loan program.
What is the SBA Loan Program
The SBA partners with lenders to create financing solutions for small businesses. The largest SBA loan programs include the SBA 7(a), 504 and microloan, as well as disaster loans that include funding for businesses suffering economic injury from COVID-19. In addition, the SBA rolled out the Paycheck Protection Program (PPP) in 2020, providing small businesses financial relief during the coronavirus pandemic.
Which SBA Program is right for my clients' business?
The SBA program that’s right for your clients' company will depend on the amount your clients are seeking as well as the purpose of the loan.
SBA 7 (a) loan program
The SBA 7(a) loan program is the SBA’s primary product for general financing. With favorable rates and terms, the standard 7(a) loan is the most popular SBA program available today — more than 42,000 7(a) loans were made in fiscal year 2020, at a total of $22.55 billion.
Loan amounts
The maximum loan amount for the 7(a) loan is $5 million.
Rates and terms
Repayment terms can extend up to 25 years with fixed or variable interest rates based on the federal prime rate.
How to apply
To qualify for a standard 7(a) loan, businesses must meet eligibility requirements, including:
- Operating for profit
- Operating within the U.S. or U.S. territories
- The business owner having equity invested in the business
- Alternative financing sources used before seeking SBA funding
- Meeting the SBA's size standards, based on average annual receipts or average number of employees (varies by industry)
You can use the SBA’s Lender Match Tool to find an approved SBA lender near you and start the application process.
Other SBA 7 (a) loan programs
7(a) Small Loan
The 7(a) small loan offers similar terms and use of proceeds as the 7(a) standard loan with a lower maximum loan amount.
- Loan amounts: Up to $350,000
- Terms: Generally similar to 7(a) loan
- Eligibility: Generally similar to 7(a) loan
SBA Express
The SBA Express loan offers a quick turnaround — applicants can receive a response within 36 hours. Acceptable use of proceeds is the same as the 7(a) loan, including working capital and the purchase of equipment, fixtures and real estate.
- Loan amounts: Up to $1 million (reverts to $350,000 on Oct. 1, 2021)
- Terms: Up to 25 years; interest rates range from Prime + 4.5 to Prime 6.5%
- Eligibility: Made by the lender
Export Express
The Export Express loan offers fast funding — typically within 24 hours — for small exporters.
- Loan amounts: Up to $500,000
- Terms: Up to seven years (if used as a line of credit); interest rate caps at Prime + 6.5% for loans of $50,000 or less and Prime + 4.5% for loans over $50,000
- Eligibility: Same as 7(a) loan, though business must be operational for at least 12 months
Export Working Capital
The Export Working Capital loan helps export companies through financing for working capital, suppliers, inventory and the production of export goods or services.
- Loan amounts: Up to $5 million
- Terms: Up to one year (if used as a line of credit); interest rate negotiated between lender and borrower with no SBA cap
- Eligibility: Same as 7(a) loan, though business must be operational for at least 12 months
Community Advantage
The Community Advantage (CA) program provides financing to small businesses in underserved markets, such as low-income communities, veteran-owned businesses and rural areas.
- Loan amounts: Up to $250,000
- Terms: Up to 25 years; maximum interest rate of Prime + 6.5%
- Eligibility: Same as 7(a) loan
CAPLines
CAPLines are government lines of credit businesses use to finance seasonal or short-term working capital needs. There are four types of CAPLines — working capital, contract, seasonal and builders. CAPLines can be a revolving line of credit.
- Loan amounts: Up to $5 million
- Terms: Up to 10 years; fixed rates up to Prime + 8.0%, variable rates up to Prime + 4.75%
- Eligibility: Same as 7(a) loan
Note that specific CAPLines may apply additional eligibility requirements — the builders line, for example, requires a track record of completing construction and/or renovation projects.
SBA 504 loan program
The SBA 504/CDC loan program partners with Certified Development Companies (CDCs) to provide long-term financing to purchase major fixed assets. A 504/CDC loan provides up to 50% funding from a commercial lender and up to 40% funding from the CDC office in your area; you will have to provide at least 10% as equity.
Loan amounts
The range of the CDC portion in a single project is $5 million, increasing to $5.5 million for some manufacturers and energy-related projects.
Rates and terms
Repayment terms for the CDC portion of the loan range from 10 to 25 years, and interest rates are tied to the five- and 10-year Treasury rates. The third-party lender may offer a fixed or variable rate, with the maximum rate being the lesser of 9.25% (based on the prime rate) or the maximum interest rate permitted in a given state. Terms for third-party loans are negotiated between lender and borrower, though the SBA has required term length minimums depending on the CDC loan’s term.
How to apply
To qualify for a 504 loan, eligible businesses must:
- Not exceed $15 million in tangible net worth
- Not exceed $5 million in average net income
- Meet job creation and retention requirements
The SBA’s Lender Match Tool can help you contact an SBA-approved CDC lender to begin the application process.
Microloans
The SBA microloan program provides direct loans to microloan intermediaries to provide financing to underserved markets, including women, low-income applicants and minorities.
Loan amounts
Microloan amounts can range up to $50,000. The average microloan amount was $14,434 in fiscal year 2020.
Rates and terms
Repayment terms can extend up to seven years. Rates typically range from 7% to 9% and are negotiated between the borrower and intermediary.
How to apply
Contact your local SBA district office to find an SBA-approved intermediary near you. Eligibility requirements may vary by each microlender.
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SBA 7 (a) loan program
The SBA 7(a) loan program is the SBA’s primary product for general financing. With favorable rates and terms, the standard 7(a) loan is the most popular SBA program available today — more than 42,000 7(a) loans were made in fiscal year 2020, at a total of $22.55 billion.
Loan amounts
The maximum loan amount for the 7(a) loan is $5 million.
Rates and terms
Repayment terms can extend up to 25 years with fixed or variable interest rates based on the federal prime rate.
How to apply
To qualify for a standard 7(a) loan, businesses must meet eligibility requirements, including:
- Operating for profit
- Operating within the U.S. or U.S. territories
- The business owner having equity invested in the business
- Alternative financing sources used before seeking SBA funding
- Meeting the SBA's size standards, based on average annual receipts or average number of employees (varies by industry)
You can use the SBA’s Lender Match Tool to find an approved SBA lender near you and start the application process.