SBA loans: 7(a), 504 and microloans
SBA-backed loans are usually cheaper than online business loans and take much longer to arrange. Here’s how they work and when they’re worth the wait.
Program figures from sba.gov. Last checked .
How SBA loans work
The SBA guarantees part of each loan, which lowers the lender’s risk. In return, lenders follow SBA rules on how much they can charge, how long the loan can run and what it can pay for. You apply with an SBA-approved lender, certified development company or nonprofit intermediary, not with the SBA itself.
The main programs
SBA loan programs, per sba.gov (last checked October 14, 2026)
- Maximum
- $5 million
- Made by
- SBA-approved lenders
- Longest term
- Up to 25 years for real estate; generally 10 years or less for equipment and working capital
- Maximum
- $350,000
- Made by
- SBA-approved lenders
- Longest term
- As for 7(a)
- Maximum
- $500,000, with a 50% SBA guaranty
- Made by
- Lenders with delegated authority
- Longest term
- As for 7(a)
- Maximum
- Up to $5 million ($5.5 million for certain projects), per SBA
- Made by
- A certified development company with a bank
- Longest term
- 10, 20 or 25 years
- Maximum
- $50,000
- Made by
- Nonprofit intermediaries
- Longest term
- Seven years
Loan availability, amounts, rates and terms vary by state and lender.
What SBA lenders can charge
SBA sets a maximum rate rather than a fixed one. For variable-rate 7(a) loans, the cap is a base rate, usually the prime rate, plus a spread that depends on the loan size (SBA 7(a) terms and conditions):
| Loan amount | Maximum rate |
|---|---|
| $50,000 or less | Base rate + 6.5% |
| $50,001 to $250,000 | Base rate + 6.0% |
| $250,001 to $350,000 | Base rate + 4.5% |
| More than $350,000 | Base rate + 3.0% |
504 loans carry a fixed rate pegged above the 10-year Treasury rate (SBA 504 loans). Microloan rates are generally between 8% and 13% (SBA microloans).
How long SBA loans take
SBA loans take weeks, and larger 7(a) and 504 loans often take a couple of months or more. Most of that time goes on gathering documents and the lender’s underwriting, before the SBA’s own review. If you need money this week, an SBA loan is unlikely to arrive in time.
When an SBA loan is worth the wait
- You’re buying premises, a business or long-life equipment and want a long, lower-cost term.
- You can plan ahead and have tax returns and financial statements ready.
- Your business is new or small and a microloan intermediary’s support would help.
If speed matters more, an online business loan or line of credit is usually faster but costs more. Compare the APR either way.
Watch out for
Be wary of anyone who says they work for the SBA, uses an SBA seal or promises approval. If someone helps you get an SBA loan for a fee, that fee has to be disclosed on SBA Form 159. For a side-by-side comparison of every program, read SBA 7(a), 504 and microloans compared.
Want to compare other business financing too? Send one request to lenders in our network. FastLoan is not affiliated with the SBA and doesn’t make SBA loans.
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