SBA Business Loans
Whether you're starting a new business, expanding operations, purchasing equipment, or acquiring an existing company, SBA loans offer flexible financing backed by the U.S. Small Business Administration. The government guaranty behind these loans often makes lower down payments, longer terms, and more competitive rates possible than a conventional business loan.
Estimate only. SBA 7(a) loans are typically priced at the WSJ Prime Rate plus a lender margin, which varies by loan size and lender. Does not include the one-time SBA guaranty fee — see below. Actual rate and terms depend on underwriting.
What Is an SBA Loan?
An SBA loan is a loan made by a private lender, like MyLoanDesk's network of lending partners, and partially guaranteed by the U.S. Small Business Administration. The SBA doesn't lend the money directly — its guaranty reduces the lender's risk, which is what allows SBA loans to offer terms that are often more accessible than a typical conventional business loan: lower down payments, longer repayment terms, and financing for businesses that might not otherwise qualify for conventional credit on their own.
The most widely used SBA program is the 7(a) loan, which allows up to $5 million in financing for a broad range of business purposes. Faster, smaller options like SBA Express also exist for businesses that need a quicker decision on a smaller loan amount.
Ways to Use SBA Financing
Working Capital
Cover payroll, inventory, or day-to-day operating expenses during growth or seasonal fluctuations.
Equipment Financing
Purchase or replace machinery, vehicles, or technology your business needs to operate or expand.
Business Acquisition
Buy an existing business, including goodwill and equipment, often with a lower down payment than conventional financing.
Debt Refinance
Consolidate or refinance existing higher-rate business debt into a single, often lower-cost SBA loan.
Franchise Financing
Finance the franchise fee, build-out, and startup costs of opening a new franchise location.
Lines of Credit
SBA CAPLines and similar revolving structures for businesses with fluctuating short-term capital needs.
How SBA Financing Works
Program Highlights
- Financing up to $5M through the SBA 7(a) program
- Faster SBA Express option available for loans up to $500,000
- Terms up to 10 years for working capital and equipment, up to 25 years when real estate is involved
- Flexible use of proceeds — working capital, equipment, acquisition, refinance, and more
- Often lower down payments than conventional business financing
- Available to a wide range of industries and business types
A Note on the SBA Guaranty Fee
Most SBA loans with a term longer than 12 months include a one-time guaranty fee, paid on the SBA-guaranteed portion of the loan. This fee is set and reviewed annually by the SBA and generally scales with loan size — as a general guide:
| Loan Term | Typical Guaranty Fee Range |
|---|---|
| 12 months or less | Around 0.25% of the guaranteed portion |
| Over 12 months, up to $1M guaranteed portion | Around 3.5% of the guaranteed portion |
| Over 12 months, above $1M guaranteed portion | Around 3.75% of the guaranteed portion |
These figures are general guidance only. The SBA updates its fee schedule annually, and certain borrowers — including some manufacturers and veteran-owned businesses under specific programs — may qualify for reduced or waived fees. Confirm the exact current fee with a loan officer before finalizing your application.
The SBA's guaranty means lenders can extend credit to businesses that might not qualify for a conventional loan on their own — newer businesses, or those without extensive collateral, often have a real path to financing here that wouldn't otherwise exist.
Longer repayment terms than most conventional business loans mean lower monthly payments, which keeps more cash available for actually running and growing the business rather than servicing debt.
Because proceeds can often be used flexibly — combining an acquisition, working capital, and even real estate into one loan — SBA financing can simplify what would otherwise be several separate loans into a single, more manageable one.
Who SBA Loans Are For
- Small business owners who don't qualify for conventional financing on their own
- Buyers acquiring an existing business
- Businesses needing working capital through a growth phase or seasonal cycle
- Franchisees opening a new location
- Business owners looking to consolidate or refinance existing higher-cost debt
General Eligibility Guidelines
- Operates as a for-profit business located in the U.S.
- Meets SBA size standards for a "small business" in your industry
- Demonstrates the ability to repay from business cash flow
- Owner has invested reasonable equity, and has exhausted other reasonable financing options
- Good personal and business credit history, generally a high-600s credit score or better
SBA 7(a) vs. SBA Express vs. Conventional Business Loan
| SBA 7(a) | SBA Express | Conventional Business Loan | |
|---|---|---|---|
| Max loan amount | $5M | $500K | Varies by lender |
| Approval speed | Standard underwriting | Faster, streamlined | Varies by lender |
| Government guaranty | Up to 85% | Lower guaranty than standard 7(a) | None |
| Typical down payment | As low as 10% | As low as 10% | Often higher |
| Best for | Larger, flexible-use financing | Smaller loans needing a fast decision | Strong businesses that don't need SBA flexibility |
Frequently Asked Questions
What can I use an SBA loan for?
SBA loan proceeds are flexible and can generally be used for working capital, equipment purchases, business acquisitions, debt refinancing, franchise financing, and commercial real estate. The specific program you use can affect which uses are eligible and the maximum term available.
How much can I borrow with an SBA loan?
SBA 7(a) loans, the most widely used SBA program, go up to $5 million. Smaller programs like SBA Express offer faster approval on loans up to $500,000, while SBA microloans are available for smaller amounts, often used by newer or smaller businesses.
What is the SBA guaranty fee?
The SBA guaranty fee is a one-time, government-set fee paid on the guaranteed portion of most SBA loans with a maturity over 12 months, in addition to interest. Fee tiers vary by loan size and are reviewed and published annually by the SBA, so the exact percentage should be confirmed at the time of your application.
Do I need collateral for an SBA loan?
It depends on the loan size and program. Smaller SBA loans may require little to no specific collateral, while larger loans typically require available business or personal assets to be pledged, though the SBA generally won't decline a loan solely for lack of full collateral if the business otherwise qualifies.
How long does SBA loan approval take?
Timelines vary by program and lender. Standard SBA 7(a) loans often take several weeks to a few months, while SBA Express and similarly streamlined programs are designed for faster turnaround, sometimes within days for an initial decision.
What is SBA Express and how is it different from a standard 7(a) loan?
SBA Express is a streamlined version of the 7(a) program offering faster approval turnaround, typically for loans up to $500,000, in exchange for a lower SBA guaranty percentage than a standard 7(a) loan.
Can I use an SBA loan to buy an existing business?
Yes. SBA 7(a) loans are commonly used to finance the purchase of an existing business, including goodwill, equipment, and in some cases real estate associated with the acquisition, often combined into a single loan.
What credit score do I need to qualify for an SBA loan?
SBA lenders generally look for a personal credit score in the high 600s or above, along with a review of business cash flow, time in business, and industry experience. Requirements vary by lender and loan program.
Can I use an SBA loan to buy commercial real estate?
Yes — SBA 7(a) and SBA 504 loans are both commonly used to purchase or refinance commercial real estate, often with lower down payments than a conventional commercial mortgage. See our Commercial Real Estate Loans page for details specific to property purchases.