The SBA program that’s right for your company will depend on the amount you’re seeking as well as the purpose of the loan.
SBA 7(a) loans
Ideal for general business financing
The SBA 7(a) loan is typically the most popular option in the U.S. Small Business Administration (SBA) loan program. This working capital loan can provide up to $5,000,000 to use toward general business expenses like working capital, inventory, equipment and real estate. The SBA can guarantee up to 85% of loans up to $150,000 and up to 75% of loans greater than $150,000.
Repayment terms depend on the use of funds:
- 25 years for commercial real estate
- 10 years for equipment
- 10 years for working capital or inventory
Collateral may be required for loans exceeding $50,000. Interest rates may either be fixed or variable and are based on the federal prime rate.
SBA 7(a) variable loan interest rates
| Loan amount | Rate standard | Variable maximum allowable (with current 7.75% prime rate) |
| $0 to $50,000 | Base* + 6.5% | 14.25% |
| $50,001 to $250,000 | Base* + 6% | 13.75% |
| $250,001 to $350,000 | Base* + 4.5% | 12.25% |
| $350,000 or above | Base* + 3% | 10.75% |
*Variable interest rate 7(a) loans are pegged to the prime rate (currently at 7.75%), the LIBOR rate or the SBA optional peg rate.
According to the SBA, fixed interest rate 7(a) loans are based on the prime rate in effect on the first business day of the month of your loan.
SBA 7(a) fixed loan interest rates
| Loan amount | Fixed maximum allowable (with current 7.75% prime rate) |
| $0 to $25,000 | 15.75% |
| $25,000 to $50,000 | 14.75% |
| $50,000 to $250,000 | 13.75% |
| Over $250,000 | 12.75% |
Rates accurate as of November, 2024.
Borrowers must also pay a guaranty fee, which would be a percentage of the loan amount. Fees range from 0% for veteran-owned businesses and loans under $1 million, and up to 3.75% for other borrowers.
SBA CDC/504 loans
Ideal for financing major fixed assets
The SBA 504 loan program combines funds from the SBA and Certified Development Companies (CDCs). These loans can be used to purchase fixed assets such as commercial land, buildings and fixed assets like machinery, and to finance construction projects related to commercial property.
Typically, the bank or financial institution provides 50% of the loan amount and the CDC (backed by the SBA) provides 40%, leaving you to contribute the final 10%. In some situations, you may have to contribute 20%.
The maximum 504 loan size is $5 million, though certain energy-related projects may qualify for $5,500,000. Repayment terms are 10, 20 or 25 years. Interest rates for 504/CDC loans are approximately 3.00% of the total loan amount.
If deciding between the SBA 7(a) versus 504 loan, note that the 504 option allows you to finance fixed assets at a lower fixed interest rate — typically 3.00% versus the 7(a)’s lowest fixed rate of 13.5%. However, the 504 loan program has a job creation and retention requirement, which means you need to create or retain at least one job opportunity per every $90,000 guaranteed by the SBA.
SBA Express loans
Ideal for fast approvals
The SBA Express loan can be a good option for companies needing fast funds to cover urgent expenses. Borrowers typically receive a lending decision within 36 hours, compared to five to 10 days for SBA 7(a) loans.
However, the name “express” can be misleading — although these loans have quick turnaround times, it can take between 25 to 60 days for funds to be deposited into your bank account.
Loan amounts go up to $500,000, with maximum terms of 120 months for lines of credit and 25 years for real estate. You can use the funds the same as the 7(a) loan, including covering working capital expenses, purchasing equipment and more.
SBA Export Express loans
Ideal for export companies requiring fast turnarounds
Many U.S. lenders view export companies as risky businesses, making it challenging to get financing for short- and long-term expenses. Due to this need, the SBA created several options for export companies needing fast funds — including term loans and lines of credit.
The SBA Export Express loan can provide up to $500,000, with terms of up to 84 months if used as a line of credit (terms not specified for term loans). As a line of credit, you can withdraw up to your set limit as often as needed, only paying interest on the withdrawn amounts.
Since you don’t need prior approval from the SBA, you can typically receive a response time within 24 hours. However, it can take up to 90 days after that to get your funds.
SBA Export Working Capital
Ideal for export companies in need of working capital
The Export Working Capital loan helps companies that generate export sales access the financing they need for working capital, suppliers, inventory and the production of export goods or services.
Loan amounts go up to $5,000,000, with terms up to 36 months if used as a line of credit (terms not specified for term loans). Note that the Export Working Capital loan interest rates are set by the lender — the SBA doesn’t require a capped limit like it does with the other SBA loan programs.
If you want to learn more about competing with the global market, you can reach out to a U.S. Export Assistance Center (USEAC) in your region.
SBA microloans
Ideal for women, low-income, veteran and minority entrepreneurs requiring smaller loan amounts
SBA microloans are issued to small businesses and nonprofit childcare facilities through nonprofit lenders and community-based organizations. These loans are available up to $50,000 with maximum repayment terms of 84 months. Rates typically range from 8.00% to 13.00%.
The SBA microloan program primarily serves new or early stage businesses in underserved markets. Eligible borrowers include business owners with little to no credit history, low-income businesses, women-owned companies and minority entrepreneurs.
SBA disaster loans
Ideal for small businesses affected by declared disasters
Disaster loans differ from other SBA loans because the SBA provides disaster funds instead of guaranteeing loans made through intermediary lenders.
The SBA offers low-interest disaster loans to businesses, homeowners and renters in areas where a federally declared disaster occurs. Most disaster loans are available up to $2,000,000.
Business owners can use disaster loans for working capital expenses or other disaster-related business losses that insurance does not cover.
Current types of disaster loans offered by the SBA include:
- Physical damage loans: If your business is located in a declared disaster area and has been damaged, you can apply for up to $2,000,000 in financial assistance from the SBA.
- Mitigation assistance: You can apply to receive funding to help protect your business against future disasters, such as floods and earthquakes.
- Economic Injury Disaster Loans: If you own a business, small agricultural cooperative or nonprofit organized in a declared disaster area and have suffered economically, you might be eligible to receive up to $2,000,000 in government assistance.
- Military reservist loans: SBA can provide up to $2,000,000 to help with operating expenses if one of your essential employees is a military reservist and is called to active duty.
- Hawaii wildfires: Businesses of all sizes affected by the Hawaii wildfires can apply for financial assistance with the SBA, although the application filing deadline for economic injury is May 10, 2024, and the deadline for physical damage has already passed.
- Hurricane Idalia: If your business was affected by Hurricane Idalia and is located in an eligible area in Florida and Georgia, you might qualify for an SBA disaster loan.
SBA CAPLines
Ideal for lines of credit for short-term or seasonal financing
An SBA line of credit, also called a CAPLine, can help your business cover seasonal or short-term working capital needs. In general, SBA CAPLines are cheaper than traditional business lines of credit. If approved, you can access up to $5,000,000 with repayment terms of up to 120 months.
There are four types of SBA CAPLines to consider:
- Working capital: Ideal for general business expenses, like paying rent, hiring staff, buying inventory. This is typically the easiest CAPLine to get, but it may come with extra fees.
- Contract: Can help businesses fulfill specific contracts, such as purchasing materials, paying for contract workers or custom orders.
- Seasonal: Ideal for covering seasonal changes, such as stocking up on time-sensitive inventory or hiring staff for busy seasons.
- Builders: Funds can be applied to help cover construction costs for residential or commercial property, such as hooking up utilities, professional landscaping, labor and materials and more.
Note that specific CAPLines may apply additional eligibility requirements — the builders line, for example, requires a track record of completing construction and/or renovation projects.
SBA International Trade loans
Ideal for companies wanting long-term funding to keep up with foreign competitors
An SBA International Trade loan can help U.S.-based companies develop or improve products and services to sell abroad. Financing goes up to $5,000,000, with terms up to 120 months.
The main purpose of this loan is to help strengthen your business model so you can better compete in the global market.
Here are some examples of how you could use funds from an International Trade loan:
- Facility upgrades or expansions
- Equipment financing
- Participation in overseas trade shows
- Translation services
- Debt refinancing
