SBA loans

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Extended repayment

Finance ongoing projects or costly expenses over several years.

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Competitive terms

Get access to the most favorable interest rates on the market.

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Flexible use of funds

Use your SBA loan for working capital, real estate, inventory, equipment and more.

Achieve your goals with an SBA loan

It can be challenging to get approved for a bank loan, especially with limited collateral.

If you’ve encountered roadblocks with conventional lenders, SBA loans are an accessible, affordable alternative.

What is an SBA loan? SBA loans are partially guaranteed by the Small Business Administration (SBA)—up to 85% in some cases. As a result, lenders that partner with the SBA face less risk in the case of default. That means more access to affordable long-term financing for small business owners.

  • Coins stacked on table with blue arrow pointing up
    Financing amount Up to $5,000,000
  • Calendar image appearing as though the page is being flipped
    Repayment terms 5 - 25 years
  • Speedometer icon
    Interest rate Starting at 6.25%
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    Funds available in 7 days

SBA loans made easy

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Compare 7(a), 504 and Express loan programs from our nationwide network of lenders. Learn More
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SBA loan requirements

Good credit, established business history and a pattern of positive cash flow are all factors SBA lending partners consider.

What you’ll need to qualify:

  • 2+ years in business
  • $50K+ annual revenue
  • 650+ credit score

Best SBA loan uses

While the SBA does have a few restrictions on the use of funds, there’s still a lot of flexibility. Here’s how you can run and grow your business with an SBA loan.

Increase working capital

If you want to build a reserve of working capital deep enough to cover day-to-day costs, foreseen or not, consider an SBA loan.

Refinance debt

If you’re currently paying off a number of high-interest loans, replacing this expensive debt with a low-interest, long-term SBA loan can make a big difference for your bottom line.

Expand your business

Whether you’re introducing a new product or opening another location, you’ll need capital to execute on your vision. The best SBA loans can provide the cash you need without burdening your business with high-cost debt.

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SBA loan FAQs

Why should you consider an SBA loan?

According to the National Small Business Association, financing remains elusive for 1 out of 4 small business owners. This is particularly true at large banks, where 15% of businesses rely on bank-backed loans.

An SBA loan can provide you with the capital you need to grow your business with competitive terms.

How do SBA loans work?

SBA loans work by lowering the risks lenders face when lending to small business owners. How? SBA loans are partially guaranteed by the Small Business Administration and issued exclusively to small business owners by SBA-approved lenders.

Should a borrower default on their loan, the SBA reimburses the lender up to 85% of the loan amount.

As a result, participating creditors consider a larger pool of applicants and offer competitive terms. All this translates into greater access to long-term financing, lower interest rates, longer repayment periods and affordable SBA loan payments.

What are the different types of SBA loans?

SBA 7(a) loan program

When most small business owners think of an “SBA loan,” the SBA 7(a) loan program is what comes to mind. Its popularity is due to its flexibility since these types of SBA loans have few limitations.

Funds can be used for almost any business purpose, whether you require working capital to sustain your operations, a loan to refinance existing debt or cash to invest in the expansion of your business.

Here are 3 of the most popular loan programs under the SBA 7(a) umbrella:

Standard 7(a) loans

You can borrow up to $5 million through the standard SBA 7(a) loan program. Interest rates are negotiable, and loans typically reach maturity in 7 years or 25 years depending on how the money is used.

The SBA guarantees 75% for loans greater than $150,000 or 85% for loans up to $150,000. SBA loan interest rates are most often variable based on the current Prime rate plus an additional lender rate.

The amount of time it takes to finalize a standard SBA loan (from application to funding) varies by lender, but is usually between 60 to 90 days.

SBA 7(a) loans at a glance:

  • Loan Amount: Up to $5 million
  • Interest Rate: Prime (+ a maximum of 4.75% in lender interest)
  • Term: 7-25 years
  • Time to Funding: 60-90 days

SBA Express loans

If you’re looking for quick SBA loan financing, you might be disappointed to find that the SBA funding process is lengthy. However, SBA Express financing short-cuts this process and is the best choice for a fast SBA loan. When you submit an SBA Express loan application, you’ll receive a decision from your lender within 36 hours. Funds are deposited within your business bank account in as little as 7 days.

The trade-off for this speed is less borrowing potential and higher interest rates. Through the SBA Express program, you can acquire up to $350,000 over a 5- to 10-year term. The SBA will back up to 50% of this amount and lenders can tack on an additional 4.5% to 6.5% in interest depending on the amount borrowed.

SBA Express loans at a glance:

  • Loan Amount: Up to $350k
  • Interest Rate: Prime (+ a maximum of 6.5% in lender interest)
  • Term: 5-10 years
  • Time to Funding: 7-60 days

SBA lines of credit (CAPLines)

CAPLines are ideal for business owners with short-term and cyclical working capital needs. Credit lines go up to $5 million and are available with a maximum repayment term of 10 years.

Here are the 5 distinct lines of credit offered under this program:

  • Seasonal CAPLine
  • Contract CAPLine
  • Builders CAPLine
  • Asset CAPLine
  • Working Capital CAPLine

Funds from each program are expense-specific, meaning they can only be used to fund projects that fall within the credit line’s classification. For example, funds from a seasonal CAPLine cannot be used to finance storefront renovations.

SBA CAPlines at a glance:

  • Loan Amount: Up to $5 million
  • Interest Rate: Prime (+ a maximum of 4.75% in lender interest)
  • Term: Not to exceed 10 years (5 years for Builders CAPLine)
  • Time to Funding: 60-90 days

SBA CDC/504 loans

The second most popular type of SBA loan is the CDC/504 program. You should consider this program if you’re looking to acquire or improve a major fixed asset, such as land, real estate or equipment.

SBA CDC/504 programs are unique in the way they’re structured. A lender partners with a certified development company (CDC)—a specialized non-profit corporation—to finance a loan request. In this agreement, a lender funds 50% of the total project cost and the CDC funds 40%, with the borrower responsible for the remaining 10% as a down payment. The SBA backs only the CDC portion of the loan.

There is no maximum loan amount for this program, but the SBA sets a limit for what the CDC can contribute and is willing to guarantee. That maximum is $5 million.

The interest rate on the lender-portion of the loan is negotiated between the lender and the borrower and subject to an interest rate cap. The rates on the CDC portion are based on the current 5- or 10-year Treasury rate.

SBA CDC/504 at a glance:

  • Loan Amount: Unlimited
  • Interest Rate: Negotiable (third-party lender)/ 5- or 10-year Treasury + 0.38% – 0.48% (CDC)
  • Term: 10 or 20 years
  • Time to Funding: 60-180 days

SBA micro loans

If you’re an entrepreneur—particularly a solopreneur—and require only a few thousand dollars to finance a project, consider an SBA micro loan.

What is a micro loan? In short, SBA micro loans are issued by non-profit, community-based organizations with experience in lending. You can borrow up to $50,000, but the average micro loan issued is $13,000.

Though SBA-backed micro loans can be used to fund a variety of projects, they cannot be used to acquire real estate or to refinance existing debt.

Interest rates vary, but in general, range between 8% to 13%.

SBA micro loans at a glance:

  • Loan Amount: Up to $50,000
  • Interest Rate: 8% – 13%
  • Term: 6 years
  • Time to Funding: 30-60 days

How much will an SBA loan cost me?

You’d be hard-pressed to find a program with more favorable terms. Aside from a conventional bank loan, SBA loan interest rates tend to be the lowest of all financing options available to small businesses.

Your SBA loan payment will depend on the program, the amount borrowed and the term.

For example, Fast Capital 360’s SBA lending partners charge a variable interest rate as follows:

 

SBA loan type Loan amount Interest rate
SBA Express Up to $50,000 Prime plus 3.75%
SBA Express $50,000-$350,000 Prime plus 2.75%
SBA commercial real estate loans $500,000-$5,000,0000 Prime plus 1.5%

 

Be aware that some SBA lending partners charge an origination fee or loan packaging fee. 

Additionally, the SBA charges a guarantee fee, which is passed on to the borrower.  SBA guarantee fees by loan amount are outlined below. 

Loan amount SBA guarantee fee*
Up to $150,000 1.7% of the loan amount 

(or 2% of the guaranteed portion)

$150,001-$700,000 2.25% of the loan balance 

(or 3% of the guaranteed portion)

$700,000+ 3.5% of the guaranteed portion up to $1 million, plus 3.75% of the guaranteed portion exceeding $1 million

*For 7(a) loans in an eligible Rural Area or HUBZone, the guarantee fee is reduced by about 67%.
To estimate your total cost of borrowing, use our SBA loan calculator.

To estimate your total cost of borrowing, use our SBA loan calculator. 

 

What are SBA loan requirements?

SBA loan requirements call for your business to be “financially healthy.” What does this mean?

For starters, business owners might need a personal credit score of 650 or better to qualify for an SBA loan.

Second, while some SBA loans (like the micro loan) are suitable for startups, most lenders require at least 2 years of business history.

Additionally, an applicant must demonstrate a history of positive cash flow, with enough capital on hand to sustain operations and cover monthly SBA loan payments and other debt obligations.

SBA loan requirements also stipulate that your track record must be free of recent bankruptcies, foreclosures and open tax liens.

What you’ll need to qualify:

  • Time in business
    2+ years
  • Annual revenue
    $50K+
  • Credit score
    650+

How can I apply for an SBA loan?

To apply for an SBA loan, you’ll need to provide the following documents:

  • 2 years of business and personal taxes
  • 4 most recent months of bank statements
  • Current year’s financials (i.e., income statement and balance sheet)
  • Current outstanding debt or loan information

Complete our simple and secure application, and we’ll pair you with some of the best lenders for SBA loans across the country. Applying is fast, easy—and most importantly—won’t impact your credit.

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