Overview
SBA loans are government-backed financing for small businesses. The Small Business Administration doesn't lend directly. They guarantee a portion of the loan through partner banks, which means lenders take on less risk and you get better terms. Lower interest rates, longer repayment periods, and larger loan amounts than most conventional options.
The tradeoff? More paperwork and a longer approval process than other products. We'll help you navigate it and connect you with the right SBA lender for your situation.
How do I get one?
Key qualification requirements:
Business Size
The business must be classified as a "small business" according to the SBA's size standards. This varies by industry and is usually based on the number of employees or annual revenue.
Type of Business
The business must be a for-profit entity operating in the U.S. or its territories. Certain types of businesses, like those involved in illegal activities, gambling, or lending, are typically ineligible.
Good Credit
The business owner(s) generally need to have a good personal credit score. Lenders want to see that the owner has a history of paying debts on time.
Business Plan
The business usually needs to present a solid business plan showing how the loan will help the business grow or sustain itself.
Equity Investment
Owners may need to invest some of their own money into the business before seeking an SBA loan. This shows that the owner is committed to the business.
Collateral
While not always required, having collateral (like property or equipment) can help secure the loan. If the business can't repay the loan, the lender might take the collateral as payment.
Ability to Repay
The business must demonstrate the ability to repay the loan, often by showing financial statements, cash flow projections, and tax returns.
No Delinquent Debts to the Government
The business and its owners must not be delinquent on any existing debt obligations to the U.S. government, such as student loans or taxes.
Use of Funds
The loan must be used for a legitimate business purpose, like buying equipment, inventory, or real estate, or to manage working capital.
SBA Interest Rates
FAQ