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SBA Loans

SBA loans are government-backed financing with some of the most competitive rates and longest repayment terms available to small businesses. The U.S. Small Business Administration guarantees a portion of each loan, reducing lender risk and giving you access to better terms than most conventional financing. Rise helps you navigate the SBA process, from choosing the right program to connecting with approved lenders. Loan amounts up to $5,000,000 with terms up to 25 years for qualified businesses.

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What Is an SBA Loan?

An SBA loan is a business loan issued by a private lender, typically a bank or credit union, and partially guaranteed by the U.S. Small Business Administration. The SBA does not lend money directly; instead, it guarantees 50% to 85% of the loan amount, which reduces risk for the lender and enables them to offer lower rates and longer terms than they would otherwise.

SBA loans are considered the gold standard of small business financing because of their competitive interest rates (capped by the SBA), long repayment periods (up to 25 years for real estate), and flexible use of funds. However, they come with stricter qualification requirements and longer approval timelines than private alternatives like a short-term loan or merchant cash advance.

The three main SBA programs are the 7(a) loan (general purpose), 504 loan (real estate and equipment), and microloan (up to $50,000 for startups). Use our business loan calculator to estimate costs across programs.

Requirements to Qualify for an SBA Loan

Personal FICO Score

600+

The SBA sets no official credit minimum. Lenders in our network that offer SBA loans look for a score of 600 or above, and a stronger score earns better rates.

Monthly Revenue

Varies by lender

Revenue must demonstrate your ability to repay the loan over the full term. Lenders evaluate cash flow projections, not just current revenue.

Time in Business

2+ years

The SBA microloan program accepts startups, but 7(a) and 504 programs strongly prefer businesses with at least 2 years of operating history.

Additional Requirement

Exhausted Other Options

SBA requires that you demonstrate an inability to get comparable financing through non-government sources. You must also operate a for-profit business in the U.S.

SBA qualification is more rigorous than private lending, but the payoff is significantly better terms. Rise helps you understand whether an SBA loan is the right fit or whether a private long-term loan or business line of credit might be faster and more accessible.

How SBA Loans Work

Choose the Right SBA Program

The SBA 7(a) program is the most common, offering up to $5,000,000 for general business purposes. The 504 program funds real estate and large equipment. Microloans provide up to $50,000 for startups and underserved businesses. Rise helps you determine which program fits your needs.

Apply Through an SBA-Approved Lender

You apply through a bank, credit union, or approved lender, not through the SBA directly. The lender evaluates your application and submits it to the SBA for guarantee approval. Preferred Lenders can approve loans in-house for faster processing.

SBA Guarantees the Loan

The SBA guarantees 50% to 85% of the loan amount, depending on the program and loan size. This guarantee reduces the lender's risk, enabling them to offer you lower interest rates and longer terms than conventional business loans.

Receive Funds and Repay Monthly

Once approved, the lender disburses funds to your business account. You repay with fixed monthly installments over the agreed term: up to 10 years for working capital, up to 25 years for real estate. Rates are capped by the SBA to keep costs competitive.

See If You Qualify for an SBA Loan

SBA loans offer some of the best rates and terms available. Find out if your business qualifies. The initial assessment takes less than 5 minutes and won't impact your credit score.

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Pros & Cons of SBA Loans

Advantages

Lowest Interest Rates Available

SBA caps interest rates, making these loans among the most affordable business financing products. Rates are based on the prime rate plus a margin set by the SBA.

Longest Repayment Terms

Up to 10 years for working capital, 25 years for real estate. Longer terms mean lower monthly payments and more manageable budgeting.

Large Loan Amounts

Borrow up to $5,000,000 with the 7(a) program. SBA 504 loans can exceed this for major real estate and equipment projects.

Government-Backed Security

The SBA guarantee reduces lender risk, which means lenders are more willing to work with businesses that might not qualify for conventional financing alone.

Flexible Use of Funds

SBA 7(a) loans can fund working capital, equipment, real estate, debt refinancing, and more. The versatility makes them suitable for a wide range of business needs.

Disadvantages

Strict Qualification Requirements

Most SBA lenders require a credit score of 600+, 2+ years in business, strong financials, and proof that you cannot get comparable financing elsewhere. If you don't qualify, a long-term business loan may offer a faster private alternative.

Slow Approval and Funding

SBA loans typically take 30 to 90 days from application to funding. If you need capital within days, a short-term loan or merchant cash advance is significantly faster.

Extensive Documentation

Expect to provide business and personal tax returns, financial statements, a business plan, a personal financial statement, and potentially a collateral schedule. The paperwork burden is substantially higher than private lending products.

Alternatives to SBA Loans

Long-Term Business Loan

  • Private long-term financing with faster approval, days instead of months
  • Less documentation required than SBA applications
  • Terms up to 10 years with fixed monthly payments
  • Higher rates than SBA but more accessible qualification requirements
  • Best for businesses that need capital faster than the SBA timeline allows

Business Line of Credit

  • Revolving access to funds without a lump sum commitment
  • Draw only what you need and pay interest only on what you use
  • Lower documentation requirements than SBA loans
  • Good for ongoing working capital management and cash flow gaps
  • Better when you don't have a single defined use for the funds

Equipment Financing

  • Equipment-specific loans where the asset itself serves as collateral
  • Faster approval than SBA 504 for equipment purchases
  • No down payment options available with some lenders
  • Easier qualification because the equipment secures the loan
  • Best when the primary need is a specific equipment purchase

Frequently Asked Questions About

SBA Loans

What is an SBA loan?

An SBA loan is a business loan issued by a private lender, such as a bank or credit union, and partially guaranteed by the U.S. Small Business Administration. The SBA guarantees 50% to 85% of the loan, reducing lender risk and enabling better rates and terms for borrowers.

What are the three main SBA loan programs?

The three main programs are the SBA 7(a) loan (general purpose, up to $5,000,000), the SBA 504 loan (real estate and major equipment, with fixed-rate financing), and the SBA microloan (up to $50,000 for startups and underserved businesses).

Who qualifies for an SBA loan?

To qualify, you generally need a credit score of 600+, at least 2 years in business, strong financials, and you must demonstrate that you cannot get comparable financing through non-government sources. You must also operate a for-profit business in the United States.

What credit score do I need for an SBA loan?

Most SBA lenders require a personal credit score of 600 or higher. The SBA itself does not set an official minimum, but lenders use credit scores as a primary qualification factor. Higher scores improve your chances and may unlock better terms.

How long does SBA loan approval take?

SBA loans typically take 30 to 90 days from application to funding. The timeline depends on the loan program, lender type, and completeness of your documentation. SBA Preferred Lenders can approve loans faster because they have delegated authority.

What documents do I need for an SBA loan?

Expect to provide business and personal tax returns (2-3 years), financial statements, a business plan, a personal financial statement (SBA Form 413), business licenses, and potentially a collateral schedule. The documentation requirements are more extensive than private lending products.

How are SBA loans different from conventional business loans?

SBA loans offer lower interest rates (capped by the SBA), longer repayment terms (up to 25 years), and higher approval rates for businesses that might not qualify for conventional financing. The trade-off is more paperwork, longer approval times, and stricter qualification requirements.

Can startups qualify for SBA loans?

Yes, through the SBA microloan program, which provides up to $50,000 for startups and newer businesses. The 7(a) and 504 programs strongly prefer businesses with at least 2 years of operating history, though exceptions exist for strong applications with experienced ownership. If you need equipment specifically, equipment financing is another startup-friendly option since the equipment itself serves as collateral.

What are SBA loan interest rates?

SBA loan rates are capped and based on the prime rate plus a margin. For 7(a) loans, the maximum spread is typically 2.25% to 2.75% over prime for loans over $50,000. Rates vary by loan size, term, and lender. SBA 504 loans offer fixed rates that are often even lower.

Do SBA loans require collateral?

The SBA requires lenders to collateralize loans to the maximum extent possible, but a lack of collateral alone will not disqualify you. For loans under $25,000, collateral is generally not required. For larger loans, lenders may require business assets, real estate, or other security.

Is a personal guarantee required for SBA loans?

Yes. The SBA requires a personal guarantee from anyone who owns 20% or more of the business. This means your personal assets are at risk if the business defaults on the loan.

What does it mean to have exhausted other financing options?

The SBA requires that you demonstrate you cannot obtain comparable financing on reasonable terms from non-government sources. This does not mean you must be denied elsewhere. It means you must show that private alternatives do not offer comparable rates, terms, or amounts.

Can I use an SBA loan for real estate?

Yes. The SBA 504 loan program is specifically designed for commercial real estate purchases. You can also use SBA 7(a) loans for real estate, with terms up to 25 years. SBA real estate loans typically require a 10% to 20% down payment from the borrower.

Can I refinance existing debt with an SBA loan?

Yes. SBA 7(a) loans can be used to refinance existing business debt if the new loan offers better terms. The SBA has specific rules about refinancing: the existing debt must be on unreasonable terms, and the refinancing must benefit the business.

Is an SBA loan right for my business?

SBA loans are ideal if you have strong credit, established business history, and can wait 30 to 90 days for funding. If you need faster access to capital, a short-term loan or merchant cash advance provides funding within days. If you need flexible revolving credit, a business line of credit may be a better fit. Use our business loan calculator to compare options.

Trusted by Small Businesses Across the USA

Typical Funding Time

30 to 90 Days

Funding Available

Up to $5M

Businesses Funded

Across All 50 States

SBA Loans in Your State

Available across all 50 states and Washington, D.C. Pick your state to see local programs, qualification specifics, and state-tailored FAQs.

Explore SBA Loan Options

SBA loans offer the best rates and terms for qualified businesses. Let Rise help you navigate the application process and connect with approved lenders.

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