SBA Small Business Loans Review

Quick facts

• Amounts: Up to $5 million
• Terms: Up to 25 years for real estate; Up to 10 years for other purposes 
• Interest rates: Starting at 6.5% + base rate (variable-rate loans) and 5.0% + base rate (fixed-rate loans)

Product overview

SBA 7(a) loans are the most common type of SBA loan. This general-purpose business loan can cover a variety of business needs, including:

• Working capital
• Refinancing business debt
• Real estate purchases or improvement

Repayment terms for SBA 7(a) loans vary but can be far longer than many other loans that only have terms of five to seven years. You can take up to 25 years for 7(a) loans for real estate and up to 10 years when used as working capital loans or for inventory and equipment purchases.

If a borrower defaults on an SBA 7(a) loan, the SBA guarantees to repay the lender up to 75 percent of loans. If you get an SBA 7(a) Small Loan, you can get up to 85 percent guaranteed up to $150,000 and 75 percent for loans over $150,000. 

Interest rates for SBA 7(a) loans are the same, except for Export Working Capital Loans, which don’t have a maximum rate limit set. The SBA publishes maximum fixed rates on the SBA Fiscal Transfer Agent (FTA) wiki. These rates are based on your loan amount:

• $25,000 or less: 14.75%
• $25,001 to $50,000: 13.75%
• $50,001 to $250,000: 12.75%
• Greater than $250,000: 11.75%

Maximum variable interest rates are published on the SBA website. These rates are based solely on the loan amount:

• $50,000 or less: 13.25% (base rate + 6.50%)
• $50,001 to $250,000: 12.75% (base rate + 6.00%)
• $250,001 to $350,000: 11.25% (base rate + 4.50%)
• Greater than $350,000: 9.75% (base rate + 3.00%)

These rates are calculated based on the current prime rate, which was set at 6.75% in April 2026.

Loan quick facts

• Amounts: Up to $5.5 million
• Terms: 10 to 25 years
• Interest rates: From 5.31% to 5.78%

SBA 504 loan overview

SBA 504 loans (or CDC/504 loans) can be used for business growth and job creation as long as the funds are used to purchase or improve assets like real estate or long-term equipment. You won’t be able to use a 504 loan to cover short-term working capital costs. And you won’t be eligible if you are a nonprofit.

To get an SBA 504 loan, you’ll have to work with a Certified Development Company. These SBA-certified nonprofits partner with third-party lenders like banks or credit unions. 

The CDC finances up to 40 percent of approved costs, and the partner lender finances up to 50 percent. The remaining 10 percent is required equity the borrower must provide as a down payment. The down payment size could be higher if you are a startup business owner.

Interest rates for SBA 504 loans are based on an increment above the current market rate for the 10-year U.S. Treasury rate.

Loan quick facts

• Amounts: Up to $50,000
• Terms: Up to 7 years
• Interest rates: Typically 8.00% to 13.00% 

SBA microloan overview

The SBA microloan program offers up to $50,000 to small business owners looking to start or expand their businesses. According to the SBA Microloans report, the average microloan size is about $16,000. 

Like the SBA 7(a) loan, these microloans can be used for just about any business-related need, like working capital, inventory and equipment. But you won’t be able to use funds to pay existing debt or purchase real estate.

Microloans can be one of the best types of SBA loans for minorities. They're provided by SBA-approved nonprofit, community-based lenders. These lenders have a track record of helping underserved communities. In fiscal year 2024, over $85 million was provided to over 5,300 small businesses. 

There are even SBA microloans for bad credit. Lenders like Accompany Capital offer loan amounts from $1,000 to $50,000. While you'll need to show that you're generating a positive cash flow, there are no credit score requirements to qualify.

Loan quick facts

• Amounts: Up to $500,000
• Terms: Up to 10 years
• Interest rates: Up to 14.75% for fixed 7(a) loans and 13.25% for variable 7(a) loans

SBA Express loan overview

SBA Express loans are a part of the SBA 7(a) loan program. Maximum loan amounts only go up to $500,000, and the SBA only guarantees up to 50 percent of the loan. But, lenders are able to skip the SBA review process, which can lead to faster funding compared to other types of SBA loans. 

Loan quick facts

• Amounts: Up to $350,000
• Terms: Up to 25 years for real estate; up to 10 years for other purposes 
• Interest rates: Up to 14.75% for fixed 7(a) loans and 13.25% for variable 7(a) loans

SBA Community Advantage loan overview

The SBA Community Advantage loan is currently a part of the SBA pilot loan program. It has features of the SBA 7(a) loan, with maximum loan amounts of $350,000 and repayment terms of 10 years for equipment, inventory and working capital and 25 years for real estate. 

To participate in the program, lenders must provide at least 60 percent of approved Community Advantage (CA) loans to borrowers in underserved communities. These communities include:

• Low-to-moderate income communities
• Economically distressed communities
• Promise Zones (high-poverty communities that receive assistance through partnerships with the federal government and local leaders)
• Veteran-owned businesses
• Opportunity Zones (Communities designated by the U.S. Department of Treasury, where the majority of residents are typically minorities)

On October 31, 2023, the SBA phased out the SBA Community Advantage loan program. To continue offering CA loans, current CA lenders must apply to become Community Advantage Small Business Lending Companies. These new lenders will have the authority to provide regular SBA 7(a) loans to eligible businesses in underserved communities.

Learn more about the SBA Community Advantage loan.

Loan quick facts

• Amounts: Up to $5 million
• Terms: Varies: up to 10 years for most
• Interest rates: Up to 14.75% for fixed 7(a) loans and 13.25% for variable 7(a) loans 

SBA CAPLines overview

SBA CAPLines are another type of SBA 7(a) loan with maximum loan amounts of up to $5 million and repayment terms of up to 10 years for most. They offer flexible working capital that can be used on an as-needed basis, with interest only being charged for the amount you use instead of the total amount you’re approved for. 

There are four of these SBA business lines of credit. They may be revolving, which gives you the chance to replenish your credit limit as you repay what you use. Or they may be non-revolving, which means you won’t be able to re-use the credit line once you’ve repaid what you owe. 

• Seasonal CAPLine: Revolving or non-revolving SBA business lines of credit that help small business owners who experience seasonal cash-flow issues.
• Contract CAPLine: Revolving or non-revolving SBA business lines of credit used to cover expenses incurred with specific contracts.
• Builders CAPLine: Builders and general contractors use this SBA line of credit to build or renovate residential or commercial properties.

Working CAPLine: Revolving SBA business lines of credit for small business owners with existing short-term assets that can be converted to cash to repay lenders. Repayment terms for this SBA line of credit are limited to five years.

The SBA 7(a)loan program also includes:

• Export Express: Term loans or lines of credit of up to $500,000 with repayment terms of up to seven years. Can be used to help businesses develop export capabilities.
• Export Working Capital: Term loans of up to $5 million with repayment terms of 36 months that can be used to support export sales.
• International Trade: Term loans of up to $5 million used to cover various costs of producing goods and services used for international trade

If you are an entrepreneur looking to start a business or you need a business loan for bad credit, an SBA loan may be your best chance at a low-interest small business loan. Maximum SBA loan interest rates currently range anywhere from 6.00 percent to 16.00 percent. Many small business owners would struggle to get rates this low anywhere else. 

Banks and credit unions typically prefer working with established businesses with at least two years of experience and high annual revenue. This includes Wells Fargo SBA loans, which include SBA 7(a) loans and 504 loans. And online lenders that welcome startups and bad credit borrowers typically charge higher rates since they’re taking on more risk lending to these types of borrowers. Repayment terms may also be far shorter, forcing you to repay your loan in two years or less. 

Established businesses that have excellent credit may be able to find low-interest business loans with lower rates than what the SBA currently offers. Loans from banks and online lenders will likely be approved and funded much faster and with less paperwork.

Bad credit business loans provide much-needed capital to business owners who can’t qualify for traditional financing. This may include startups, people with personal credit scores of 669 and below and businesses with high levels of debt. 

For many business owners, business loans for bad credit are a fast and easy source of financing. Depending on the lender and the type of business loan, borrowers may be able to complete an application in less than five minutes and receive funding within 24 hours after approval.

But if you are able to wait and don’t mind researching lenders, an SBA loan is one of the best low-interest business loans for bad credit. The SBA sets maximum limits for how much interest a borrower can be charged. Plus, SBA bad credit loans may offer higher loan amounts and better repayment terms than other types of bad credit business loans. And like online lenders, you may be able to get approved for an SBA microloan with a credit score of 500 or above.

Top SBA 7(a) lenders

Top SBA 504 loans

Top SBA Community Advantage lenders

• Creditfy: Personal credit score of 600, six months in business and no revenue requirement
• iBusiness Funding: Personal credit score as low as 630
• Lendio: Personal credit score of 650 and $8,000 in monthly revenue
• Fundible: Website states personal credit score of 500 and 6 months in business but a spokesperson suggests a personal credit score of 650, one year in business and $250,000 in annual revenue

• SBA Form 1919: Borrower Information Form
• SBA Form 912: Statement of Personal History
• SBA Form 413: Personal Financial Statement

• Current income statement and balance sheet 
• Income statements
• Balance sheets 
• Federal income tax returns for the most recent past three years
• Cash flow projections showing positive cash flow

Credit score requirements for SBA loans vary based on the type of SBA loan and lender. For example, to qualify for an SBA loan from SMB Compass, you’ll need a business credit score of at least 650, three years in business and at least $500,000 in annual revenue. Banks may require a credit score of 670 to qualify for SBA 7(a) and 504 loans. But small business owners with lower credit scores may have an easier time qualifying for SBA microloans, which have less strict eligibility requirements. There are also online lenders like Funding Circle and Lendio that have relaxed SBA eligibility requirements.

Thanks to a lengthy application process, SBA loans can be more difficult to get compared to online loans. Plus, the eligibility requirements of some lenders and certain types of SBA loans can make it difficult for business owners with poor credit or limited financial records to qualify. So your SBA loan could be denied if you apply for the wrong type of SBA loan or with a lender that doesn’t fit your business. 

The easiest SBA loan depends on your needs. If you have bad credit, an SBA microloan can be the easiest SBA loan to get approved for. It has more relaxed eligibility requirements compared to other types of SBA loans and has more affordable rates compared to bad credit business loans found with online lenders. If you want a faster application process, the SBA Express loan has a streamlined application process and faster approval times compared to other SBA loans. If you are from a historically marginalized community, a Community Advantage Small Business Lending Company (CA SBLC) works with underserved communities to provide affordable SBA 7(a) loans.  

SBA loans may not require collateral for loans $50,000 and under, unless the lender requires it. Yet most SBA loans require some form of collateral, typically anywhere from 10 percent to 30 percent of the loan amount, depending on the type of loan. Most borrowers will need to provide a cash down payment, but property obtained with the cash or land that is part of the business need may also be eligible. 

It's possible to get an SBA loan to start a business as long as you can demonstrate an ability to repay the loan. For fiscal year 2024, over $5 billion dollars in SBA 7(a) funding went to startups to help open a business.