By Daniel Lewis,
/ Advertising Disclosure

The Small Business Administration (SBA) is an arm of the Federal government designed to provide assistance to small businesses in the USA, and it does so through a myriad of different loan programs. It guarantees the loans up to a certain amount (typically 85%), which encourages large financial institutions to lend to smaller businesses. 

The SBA  also offers a “preferred lenders” program to certain institutions, which facilitates the rapid execution of loan applications. Preferred lenders do not have to get the approval of the SBA and can process the loan themselves, resulting in a somewhat expedited process. 

The 18 SBA Loan Programs Broken Down

There are 18 well-known SBA loans with various requirements to be satisfied for the purposes of qualification. Because it can get a little complex to navigate this field, we have broken down each of them. There are 6 broad categories of SBA loans:

  1. SBA(7)(a) Loans – For small business needing up to $5 million, including minorities and underserved communities. 
  2. Microloans – For businesses requiring less than $50,000.
  3. SBA 504 Loans – For business involved in large real estate projects. 
  4. SBA CAPLines – For businesses in seasonal industries. These are most often lines of credit as opposed to term loans and are given mostly to construction and manufacturing companies. 
  5. SBA Disaster Loans – For businesses and people suffering from a disaster. 
  6. SBA Export Loans – For businesses in the export industry.

Within these broad categories, there are numerous subcategories for a total of 18 major loan programs. Technically, all of the loans are offered under the broader SBA (7)(a) program. Within this, there are multiple categories of loan offerings with specific terms and conditions. 

SBA (7)(a) Standard Loans

The SBA (7)(a)

The SBA (7)(a) is by far the most widely recognized and used program available. Loans amounts can range up to $5 million and interest rates vary from about 7% – 10%. The loan can be used for a number of different purposes, such as buying equipment, operational expenses, refinancing debt, or acquiring a new company. 

The requirements for qualification are quite high. You need to have a strong credit score (680 and above) and be in business for 2 years. You need to have very strong financial records with a steady profit and a good business plan.

The more organized you are, the better your chances of getting this loan. Though it is not official, you really need to put down some collateral in order to secure this loan. 

The SBA (7)(a) Small Loan

The SBA (7)(a) Small loan is almost identical to the SBA (7)(a), except for the fact that the total amount ranges up to $350,000 as opposed to $5 million. This is more in line with what most US small businesses will be looking for. The advantages are that it is easier to qualify for, and is processed quicker, with less documentation required. 

However, you still need to put down collateral and have a credit score of 680 to be considered, though this is at the discretion of the lending institution. 85% of the loan is guaranteed up to $150,000 and 75% of the amount from $150,000 – $350,000. 

The SBA Express Loan

The SBA Express loan is designed to offset some of the disadvantages of the SBA (7)(a), namely the long time it takes to get the loan. The SBA(7)(a) takes an incredibly long time to prepare for and process. It can take longer than 6 months to hear that your loan was rejected. This is far too long for many business owners. 

With the SBA Express Loan offer, the lender will notify you within 36 hours if your loan has been approved. The disadvantages are that the loan rates are a little steeper for this loan, and the maximum amount is $350,000, much like the SBA Small loan. 

The SBA Community Advantage Loan

The SBA community advantage loan is designed to help underserved businesses where it is hard to access capital. The qualifications for this are not as strict and the application process is fast, much like the SBA Express Loan. Loans up to $250,000 are available and the financial requirements (credit score, collateral, annual revenue, etc) are far lower. 

Businesses less than two years old, businesses with minority owners, businesses in rural areas, or businesses in underserved communities can avail of the SBA Community Advantage Loan. Businesses owned by women or veterans are also welcome to apply. 

The SBA Veterans Advantage Loan

While US army veterans can take advantage of the SBA Community Advantage Loan, they can take the more direct route of the SBA Veterans Advantage Loan, designed specifically for veterans. 

Businesses that are at least 51% owned by a veteran can apply for this loan. For loans up to $125,000, there are no fees and the term lengths range from 10 years (for equipment loans) and 25 years (real estate loans). These loans are guaranteed up to 85%. For loans between $125,000 and $350,000, the loan amounts are guaranteed up to 70% and fees are reduced. 


The SBA MicroLoan

The SBA MicroLoan program is intended for smaller businesses that need up to $50,000 in working capital to get started. The average microloan is for $13,000 and the rates are typically between 6% – 13%.

Applicants still need to have a high credit score of 640 or above, and some collateral may be required. The loan cannot be used to refinance existing debt and repayment terms are up to 6 years. This loan is faster than the SBA (7)(a) and easier to qualify for.

SBA 504 Loan

The SBA 504 Loan

The SBA 504 loan is designed to facilitate the purchase of commercial real estate (‘CRE’) and other fixed assets such as residential real estate or expensive equipment. Real estate is a unique area with specialized regulation, and often requiring larger amounts of capital.

 In order for this loan to be processed, two lenders are paired together – a lending institution and a CDC. The bank loans 50%, the CBC loans 40%, and the business owner puts down a 10% cash payment. This is the typical structure, though it may vary. 

The 504 loans can get a little complex, as each portion of the loan will have specific interest rates. Generally, you can expect to pay between 4 – 6% in fees, and repayment terms are up to 25 years. 

The maximum loan amount is $5 million per project. However, it is possible to take out an SBA 504 loan for multiple projects, up to a maximum of $20 million. Needless to say, if you are considering this loan, you need to hire an attorney or specialist to figure out all of the details. These are large and complex undertakings. At a minimum, you will need:

  • A credit score of 680 and above
  • A 10% downpayment
  • A business net worth above $15 million
  • Intend to own 51% of the finished or purchased property
  • Collateral of 20% and/or a personal guarantee from the business owner. 


Seasonal Capline CAPLines

There are 4 variants of the SBA CAPLines program – Seasonal CAPLine, Working CAPLine, Builders CAPLine, and Contract CAPLine. CAPLines are lines of credit as opposed to term loans – they can be drawn upon as needed. Remember that CAPLines are very rarely offered as standalone products, and are usually granted in conjunction with other SBA offerings. It is more difficult to get them on their own. 

Typically, SBA CAPLines are offered in conjunction with the SBA(7)(a) or the SBA 504 program. The rates are around 10% and funding is between 45 – 90 days, which might be too slow for certain businesses. The qualifying criteria are the same as for the SBA (7)(a). However, there are additional requirements. The business applicant must:

  • Have inventory and/or generate accounts receivable.
  • Be involved in a seasonal industry.
  • Have the expertise to complete the work/project/contract that the loan is being taken out for.  

The seasonal CAPLine can provide funding up to $5 million. In addition to the typical SBA (7)(a) requirements, applicants must prove that they are operating a seasonal business model. The seasonal CAPLine is the most common of all CAPLine loans.

Working Capital Line of Credit

The working capital line of credit allows business owners to convert short term assets such as invoices and accounts receivable into cash, up to $5 million. To qualify for this loan, your business must generate accounts receivable and/or have inventory and satisfy all other typical SBA(7)(a) loan requirements. Collateral and a personal guarantee will also be required. 

Builders CAPLine

The Builders line of credit is designed for business owners involved in the construction of commercial and/or residential real estate. In addition to the requirements listed above, you need to be able to complete the project that you intend to do, demonstrating the required expertise. You may use the funds (up to $5 million) for the purposes of the project, such as the payment of wages and other operational expenses. Collateral and a personal guarantee will also be required. 

Contract CAPLine

The contract line of credit is similar to the builder’s CAPLine, except that it is not restricted to real estate and construction. Any business that manufacturers goods can take out this loan for the completion of a particular contract. The funds need to be used for the purposes of completing the contract, such as the purchase of raw materials. 

Disaster Loans

Home and Personal Property SBA Disaster Loan.

Disaster loans are different from most other SBA offerings. They are there to provide assistance in the event of calamities, not to capitalize on new business opportunities. As such, the requirements are a little lower.  But you still need a credit score of 660 and above, the ability to repay the loan and to put down collateral. 

However, it is understood that your business will not be in the best shape, so it is acceptable that your recent financial statements might not be as strong as they could be. All of the disaster loans offer rates as low as 4%, with long repayment terms up to 30 years. The total amount available is up to $2 million for most of these loans. 

The Home and Personal Property SBA Disaster Loan is designed to assist people whose property has been damaged as the result of a disaster of some kind. Applicants can attain up to $200,000 if their primary place of residence has been damaged and up to $40,000 if their personal property has been damaged. 

SBA Business Physical Disaster Loan

The SBA can generate up to $2 million in funding for businesses affected by a disaster. Assets such as physical inventory, machinery, property, renovations, and fixtures are liable for claims. These disaster loans are available for all kinds of business owners. However, you need to be in an SBA disaster area in order to claim this kind of loan. Disasters might include a storm, hurricane, flooding, or rainfall. 

Economic Injury SBA Disaster Loan

Even if your business did not suffer any physical damage, your business may have been interrupted as a result of a disaster. For example, a storm or flood might have prevented customers from buying your products and/or services. In this instance, you might need to file a claim with the SBA for an economic injury loan. 

Military Reservists Economic Injury Disaster Loan

The Military Reservists Economic Injury Disaster Loan (‘MREIDL’) is designed to help small businesses who lost staff or managers due to a call of active service. So if your business is affected by a staff member being called to active duty, then you can make a claim under this section. 

For all MREIDL loans above $50,000, collateral is required. The maximum loan amount is $2 million and the rates are around 4%, which is very low. In addition, the term repayment terms are up to 30 years. 

Trade Loans

SBA Export Express Loan

The SBA Export Express loan is designed to help business owners who need financing for loans up to $500,000. An answer will be returned in less than 24 hours. This is the simplest and most straightforward of all SBA export loans and can be issued as a term loan or a line of credit. Interest rates vary between 9% – 11% and the maximum term length is 25 years for real estate exports, 10 years for working capital loans, and 7 years for lines of credit loans. 

SBA Export Working Capital Loan Program

The Export Working Capital Loan Program (‘EWLP’) guarantees cash advances linked to exporters’ account receivables. They are most often issued as lines of credit as opposed to term loans. Armed with this guarantee, usually in the form of a strong and flexible line of credit, US exporters can be more competitive in the international market. 

This is a quick and low fee process. The maximum loan amount is $5 million and the repayment length is up to 3 years, but most often less than 12 months. 

SBA Export International Trade Loan

The SBA Export International Trade loan is for US businesses that seek to expand into international markets. The loan amounts range up to $500,000 and the interest rates range from 7.5% – 10%. 

Term lengths are up to 25 years. These requirements are nearly identical to the SBA (7)(a) loan requirements. For all SBA loan offerings, a minimum credit score of 680 is needed. For this loan, you also need to put up collateral (around 20%) as well as a personal guarantee. 

Other Loan Options

If you don’t qualify for an SBA loan, don’t worry. You have a number of other options. 


Kabbage provides business lines of credit to applicants with a credit score of 560 and above with $50,000 of annual revenue. Loans up to $250,000 are available and term lengths range up to 18 months. 


OnDeck provides business lines of credit and term loans to applicants with a credit score of 600 and above with over $100,000 in annual revenue. Term loans up to $500,000 are available.

lending club

Lending Club crowdfunds loans to applicants with a credit score of 600 and above. Loans up to $500,000 are available and this is one of the biggest P2P loan platforms in the world.


Fundbox provides invoice financing to businesses who required this kind of funding to manage their cashflow. There are no minimum credit requirements with Fundbox and you can get a response within 3 minutes. They also provide business lines of credit. 

Summary: All 18 SBA Loan Programs 

The SBA does provide quite an extensive range of loan offerings for business owners of different ethnic backgrounds and involved in different industries. There is a loan available for everyone. 

However, it is still very difficult for new business owners to get up and running. The first 2 – 5 years of a business can be tricky, and cash flow management is notoriously difficult to get right, which is why so many new small businesses end up going bankrupt. 

For this reason, new business owners might be better off using an alternative lender in the meantime while applying for an SBA loan. There are a plethora of alternative loan options available and options are not limited in the current credit marketplace.

Daniel Lewis
Daniel Lewis
Daniel Lewis is an MBA accredited investment professional who wants to assist small business owners to gain access to finance. After going through many channels for funding, Lewis has found that getting the first loan right is vitally important for future success.