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SBA Loan Programs

Bank lending to small businesses is down, but it would be even lower were it not for the U.S. Small Business Administration’s loan guaranty program. The SBA does not make the loans itself, nor does it set rates. Rather, the agency guarantees a portion of the loans (up to 85%) made by lenders including banks and microfinance organizations. By guaranteeing a portion of the loan, the SBA allows lenders to make loans to small businesses that might not otherwise meet their criteria or may be deemed risky. These businesses may not be in a strong enough financial position to obtain traditional bank small business loans, and therefore rely on the SBA guarantee. The government backstop, however, comes with strict requirements and lengthy application timeframes.

SBA loans cover a wide range of business uses, including start-ups, working capital, inventory, debt refinancing, equipment purchases and more. The SBA also offers programs for microloans, disaster recovery, export assistance, and veteran and community loans.

Here’s an overview of SBA’s most commonly offered loan programs:

SBA Advantage (formerly 7(A) loan)

The SBA Advantage loan (formerly known as the 7(a) loan) is SBA’s most popular SBA guarantee program. An SBA Advantage loan allows funds to be used for starting, acquiring or expanding a small business.

  • Up to $5 million
  • Eligibility: requires last 3 years of business tax returns and two years of personal tax returns for principals with more than a 20% stake
  • Rates: from prime +1 to prime +4
  • Terms: 3-5 years, and up to 7 years

While most small businesses will qualify for a 7(a) loan, it’s worth taking a look at the SBA’s eligibility guidelines to see if you qualify. For an idea of what types of documents you’ll need to provide, check out the 7(a) loan application checklist.

SBA Express

SBA Express promises a turn around time of 36 hours for loans up to $350,000, with a maximum guaranty of 50%.

Real estate and equipment loans - SBA Grow Loan(CDC/504)

SBA Grow Loans (CDC/504) loans are long term, fixed-rate financing for real estate or other fixed assets.

  • Eligibility: the small business must occupy at least 51% of the real estate asset, cannot have sales over $6 million or more than 500 employees
  • Rates: prime +1 to prime +2
  • Terms: 7 to 25 years

From the 504 loan application to personal financial statements, you’ll need to compile quite a lot of paperwork. Your local Certified Development Company, or CDC, can guide you through the application process. Use SBA’s locator tool to find a CDC near you.

SBA Microloans

The Microloan program offers short-term loans of up to $50,000 for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment. The average microloan is about $13,000. Loans are arranged through nonprofit community based lenders, which, in turn, make loans to eligible borrowers. Approved lenders make all credit decisions on SBA microloans.

For more information, contact your local SBA District Office to find a nonprofit lender in your area, or visit this link to find the SBA’s Top 10 microlenders. Also, visit our section on Community Development Financial Institutions (CDFIs), as many CDFIs participate in SBA’s Microloan program. 


  • Competitive interest rates
  • Longer payment terms
  • No balloon payments
  • Wide range of programs available


  • Lengthy application process
  • Longer approval times
  • Strict underwriting requirements
  • Personal guarantee and collateral often required


VIDEO: What small business owners need to know about SBA’s loan guarantee program

Are you a small business owner who’s had trouble securing a traditional bank loan? Find out if you would be a good candidate for the U.S. Small Business Administration’s loan guarantee program. For information, visit sba.gov or check out www.sba.gov/tools/linc to find an SBA lender near you.