SBA Business Loans

SBA PROGRAMS

7(a) Loan

The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small businesses with special requirements. This is the best option when real estate is part of a business purchase, but it can also be used for: 

• Short- and long-term working capital 
• Refinance current business debt 
• Purchase furniture, fixtures, and supplies 

The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what the business does to receive its income, its credit history, and where the business operates. Your lender will help you figure out which type of loan is best suited for your needs.

To be eligible 7(a) loan assistance, businesses must:

• Operate for profit 
• Be considered a small business, as defined by SBA 
• Be engaged in, or propose to do business in, the United States or its possessions 
• Have reasonable invested equity 
• Use alternative financial resources, including personal assets, before seeking financial assistance 
• Be able to demonstrate a need for a loan 
• Use the funds for a sound business purpose 
• Not be delinquent on any existing debt obligations to the U.S. government 

504 Loans

The CDC/504 Loan Program provides long-term, fixed rate financing of up to $5 million for major fixed assets that promote business growth and job creation.

504 loans are available through Certified Development Companies (CDCs), SBA’s community-based partners who regulate nonprofits and promote economic development within their communities. CDCs are certified and regulated by the SBA.

To be eligible for a 504 loan, your business must: 

• Operate as a for-profit company in the United States or its possessions
• Have a tangible net worth of less than $15 million
• Have an average net income of less than $5 million after federal income taxes for the two years preceding your application

Other general eligibility standards include  falling within SBA size guidelines, having qualified management expertise, a feasible business plan, good character and the ability to repay the loan.

Loans cannot be made to businesses engaged in nonprofit, passive, or speculative activities. For additional information on eligibility criteria and loan application requirements, small businesses and lenders are encouraged to contact a Certified Development Company in their area.

Microloan

The microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000.

SBA provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries administer the Microloan program for eligible borrowers.

Eligibility is determined by each intermediary lender. Each lender has its own lending and credit requirements. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner.