Loan program

SBA Loan Programs

Government-backed financing programs offering the lowest rates and longest terms available. Ideal for acquisitions, real estate, equipment, and working capital when you can afford more documentation and processing time. SBA loans are partially guaranteed by the U.S. Small Business Administration, which allows lenders to offer more favorable terms than conventional loans. The SBA doesn't lend money directly — approved lenders provide the capital, and the SBA backs a portion of the loan, reducing risk for the lender. This structure results in lower interest rates, longer repayment terms, and lower down payment requirements compared to traditional bank loans.

  • SBA 7(a): up to $5M, working capital/equipment/acquisitions/real estate, terms up to 25 years
  • SBA 504: up to $5.5M, fixed assets only, structure is 50% lender / 40% CDC/SBA / 10% borrower
  • Down payment as low as 10%
  • Rates: Prime + 2–3% margin (variable or fixed)
  • Personal credit score of 680+ preferred (some lenders accept 650+)
  • At least 2 years in business (some exceptions for startups)
  • Owner must occupy at least 51% of real estate (for CRE purchases)
  • Total timeline: 4–12 weeks depending on complexity and responsiveness
  • Lowest interest rates available; longest repayment terms up to 25 years

SBA 7(a) Loan

Max Amount: Up to $5 million
Uses: Working capital, equipment, inventory, acquisitions, refinancing, real estate
Terms: Up to 10 years (working capital), 25 years (real estate)
Down Payment: Typically 10–20%
Rates: Prime + 2–3% margin (variable or fixed)

SBA 504 Loan

Max Amount: Up to $5.5 million
Uses: Fixed assets — real estate, equipment, renovations
Terms: 10, 20, or 25 years (based on asset life)
Down Payment: As low as 10%
Structure: 50% lender, 40% CDC/SBA, 10% borrower

Best Use Cases

  • Business acquisitions: Buy an existing business with favorable terms
  • Owner-occupied real estate: Purchase or refinance commercial property
  • Equipment purchases: Buy machinery, vehicles, or technology
  • Major renovations: Upgrade facilities or build out new space
  • Refinancing debt: Lower payments on existing high-cost loans
  • Long-term working capital: Fund growth when you need extended terms

Qualification Requirements

Eligibility Criteria:

  • Operate as a for-profit business in the U.S.
  • Meet SBA size standards (typically under 500 employees for most industries)
  • At least 2 years in business (some exceptions for startups)
  • Personal credit score of 680+ preferred
  • Demonstrated ability to repay (positive cash flow)
  • Owner must invest equity (typically 10–20% down)
  • Owner must occupy at least 51% of real estate (for CRE purchases)

Documentation Needed:

  • SBA loan application forms
  • Business and personal tax returns (3 years)
  • Financial statements (P&L, balance sheet, cash flow)
  • Business plan and use of funds narrative
  • Personal financial statement
  • Business licenses and formation documents
  • Lease or purchase agreement (if applicable)
  • Resumes of key management

Advantages

  • Lowest interest rates available
  • Longest repayment terms (up to 25 years)
  • Lower down payment requirements
  • Larger loan amounts than alternative lenders
  • Can be used for acquisitions and real estate
  • Builds strong business credit

Disadvantages

  • Longer approval process (4–12 weeks typical)
  • Extensive documentation required
  • Personal guarantee required
  • Collateral typically required
  • Stricter eligibility requirements
  • Not suitable for emergency funding

Timeline & Process

  1. Pre-qualification (1–2 days): Initial review of credit and business overview
  2. Documentation & Application (1–2 weeks): Gather and submit full documentation package
  3. Underwriting & Approval (2–6 weeks): Lender and SBA review and approval process
  4. Closing & Funding (1–2 weeks): Final documents, closing, and disbursement

Total timeline: 4–12 weeks depending on complexity and responsiveness.

Frequently asked questions

What is the difference between SBA loans and traditional business loans?
SBA loans are partially guaranteed by the government, allowing lenders to offer lower rates, longer terms, and lower down payments compared to conventional loans.
How long does it take to get approved for an SBA loan?
SBA loan approval typically takes 4–12 weeks from application to funding.
What credit score do I need for an SBA loan?
Most SBA lenders prefer a personal credit score of 680+ for SBA loans, though some may accept 650+.
Can I use an SBA loan to buy a business?
Yes, SBA 7(a) loans can be used for business acquisitions. You can finance up to $5M with terms up to 10 years for working capital or 25 years for real estate.
What is the difference between SBA 7(a) and SBA 504 loans?
The SBA 7(a) is a versatile loan that can be used for working capital, equipment, acquisitions, and real estate. The SBA 504 is specifically for fixed assets like real estate, equipment, and renovations, with a unique structure of 50% lender / 40% CDC/SBA / 10% borrower.

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