SBA Loans

SBA programs range from short-term working capital to long-term financing, and some SBA loans can even be used to refinance debt! SBA loans carry attractive terms. Learn how to qualify and apply.

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SBA Loan Details

LOAN AMOUNTS

$5,000 – $5.5 million

INTEREST RATES

varies depending on type of SBA Loan

REPAYMENT TERMS

6 – 25 years

TURNAROUND TIME

About 60 to 90 days

Pros

  • Low interest rates
  • Favorable repayment terms
  • Low down payments
  • Available for many uses
  • Little or no collateral needed

Cons

  • Smaller loan amounts on some loans
  • Longer approval process than some lenders
  • Good credit often required
  • Variety of programs may be confusing
  • Personal guarantee often required

Get to know SBA Loans

Gerri Detweiler • Updated March 16, 2022

What are SBA Loans?

SBA loans may help you start or grow your business with loans that carry lower interest rates, low down payments and favorable terms. Except for Disaster Loans, the SBA doesn’t make small business loans. Individual lenders make SBA loans, which are typically guaranteed in part by the U.S. Small Business Administration (SBA), a federal government agency.

What is the SBA?

The SBA was created in 1953 and is a U.S. federal government agency tasked with providing access to capital, along with counseling, exporting and contracting expertise for entrepreneurs. SBA loans are just a part of what it offers. Small business owners can also get free counseling through resource partners such as Small Business Development Centers, SCORE, Veterans Business Outreach Centers and Women’s Business Centers. It also provides assistance and expertise for businesses that want to qualify for government contracts or export to other countries. It is funded by taxpayers through Congressional appropriations. That means your tax dollars help it help small business owners, so be sure you take advantage of what it has to offer.

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Benefits of SBA Loans

Why consider an SBA loan? In short, because it’s probably going to be one of the best business loans for small businesses you can get. SBA loans are considered good business loans, with small business-friendly terms. Here, you’ll learn about the types of SBA loans and why you should consider this popular type of funding for your small business.

How the SBA Helps Small Businesses Get Loans

The SBA helps small businesses get loans, either directly through the Disaster Loan program or indirectly by guaranteeing a significant portion of an SBA loan made by a participating lender. The guaranty helps reduce the risk to the lender. The SBA sets detailed standards that these loans must meet. If the lender has followed SBA guidelines and the borrower defaults, the SBA will pay the guaranty amount to the lender. (The SBA then may try to collect from the borrower, and being a federal agency it has some significant collection powers.)

SBA Loan Interest Rates

The biggest draw: SBA loans offer low interest rates. “The rates are amazing,” says Bob Coleman, publisher of The Coleman Report, the leading SBA intelligence report for lenders. “For a patient entrepreneur who has her ducks in a row and is willing to go through the process, it’s a lot cheaper capital,” he explains. Interest rates may be fixed or variable, and are pegged to the prime rate, the LIBOR rate, or an optional peg rate. The SBA sets a maximum interest rate that may be charged, but beyond that, interest rates on SBA loans can often be negotiated between the borrower and the lender. SBA loan interest rates vary by program.

Get to know SBA Loans

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