SBA Loans: The Cheapest Capital Most Small Businesses Can Get
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SBA loans are bank loans partially guaranteed by the U.S. Small Business Administration, which lets lenders offer lower rates and longer terms than conventional financing. The 7(a) program (up to $5 million) covers general purposes; 504 finances real estate and heavy equipment. Rates are capped relative to prime, terms reach 10–25 years — the trade-off is paperwork and a 30–90 day process.
At a glance
| Typical amounts | $25,000 – $5,000,000 |
|---|---|
| Funding speed | 30–90 days (SBA Express can be faster) |
| Best for | Established, profitable businesses that can wait for funding and want the lowest payment. |
Requirements
- 2+ years in business (typical for approval odds)
- Good personal credit — 680+ improves odds materially
- Profitability or clear repayment ability from tax returns
- Full document package: business & personal tax returns, financial statements, debt schedule
How it works
- Prequalify with an SBA lender or marketplace.
- Assemble documentation (this is the real work — our checklist guide covers it).
- Lender underwrites, then submits for SBA guarantee.
- Close and fund; terms up to 10 years (working capital) or 25 years (real estate).
Pros and cons
| Pros | Cons |
|---|---|
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Check Your Eligibility →Frequently Asked Questions
What credit score do SBA loans require?
There is no official SBA minimum for 7(a); most lenders want 650–680+. The SBA's small-loan screening also uses the FICO SBSS business score.
How long does SBA funding actually take?
A realistic range is 30–90 days from application to funding; SBA Express decisions are faster but amounts are smaller.
Can I get an SBA loan for a startup?
Possible but harder — expect to need strong credit, industry experience, a solid plan, and typically a 10–30% equity injection.
Related options
- Working Capital Loans — Covering payroll, inventory purchases, seasonal cash-flow gaps, and short-term opportunities.
- Merchant Cash Advance — Businesses with strong card sales that need money fast and have been declined for cheaper products.
- Equipment Financing — Trucks, construction machinery, restaurant/medical equipment, manufacturing lines, IT hardware.