SBA Loans for Small Businesses
SBA loans are business loans made by approved lenders and partially guaranteed by the U.S. Small Business Administration, which allows longer terms and lower payments than most conventional business loans.
They typically fit established, profitable businesses with good credit that can wait 30 to 90 days for funding.
SBA Loans quick facts
These are the typical terms for SBA loans. Your actual terms depend on underwriting.
| Typical amount | $50,000 to $5,000,000 |
|---|---|
| Typical term | Up to 10 years (working capital, equipment), up to 25 years (real estate) |
| Typical funding speed | Typically 30 to 90 days |
| Typical minimum requirements | 2+ years in business, profitable operations, 650 to 680+ credit |
| Cost structure | Interest rate tied to Prime, plus SBA guarantee fee |
SBA Loans: good fit or not?
This option works well for some situations and is a poor match for others.
Good fit
- Business acquisitions and partner buyouts
- Owner-occupied commercial real estate
- Refinancing qualifying business debt
- Owners who want the longest terms and lowest payments
Not a good fit
- Urgent needs that cannot wait one to three months
- Businesses without profitable tax returns
- Investment real estate (SBA requires owner occupancy)
Documents usually needed
Having these ready typically speeds up review. A funder may request additional items.
- SBA application forms and personal financial statement
- Three years of business and personal tax returns
- Year-to-date profit and loss statement and balance sheet
- Business debt schedule
- Business plan and projections (for startups or acquisitions)
- Entity documents and ownership information
SBA Loans: how it works
The process typically follows 4 steps from first conversation to funding.
Pre-qualify
We review your financials to see whether an SBA program may fit.
Match with a lender
We connect you with an SBA lender suited to your loan size and industry.
Underwriting
The lender reviews your package and issues a commitment if approved.
Close
Sign documents and receive funds once closing conditions are met.
SBA Loans vs. Term Loan
The main difference comes down to structure, cost, and timing. Here is how they typically compare.
| Feature | SBA Loans | Term Loan |
|---|---|---|
| Typical speed | 30 to 90 days | 3 to 14 business days |
| Typical term | Up to 10 or 25 years | 1 to 5 years |
| Down payment | Often 10% or more for acquisitions | Usually none |
| Paperwork | Extensive | Moderate |
Typical characteristics. Terms vary by funder and file.
SBA Loans FAQs
What is the difference between SBA 7(a) and SBA 504?
SBA 7(a) is a flexible program for working capital, acquisitions, equipment, and real estate. SBA 504 is designed for major fixed assets such as owner-occupied real estate and heavy equipment.
How long does an SBA loan take?
Most SBA loans typically take 30 to 90 days from a complete application to funding, depending on the lender and loan type.
Do SBA loans require a down payment?
Many do. Acquisitions and real estate often require around 10% or more down. Working capital loans may not require one.
Do SBA loans require collateral?
SBA lenders typically take available business collateral and may take personal real estate when the loan is not fully secured. A lack of collateral alone does not always disqualify a loan.
Can I use an SBA loan to buy an investment property?
No. SBA real estate loans require the business to occupy the property. For rentals, see DSCR loans.
Can a startup get an SBA loan?
It is possible, but harder. Startups usually need strong credit, industry experience, an equity injection, and a detailed business plan.