SBA Loans: The 2019 Quick Reference Guide

Find out more about SBA loans and how your small business can access them through a trusted lender.

Updated on November 18th, 2019

The SMB Guide is reader-supported. When you buy through links on our site, we may earn an affiliate commission. Learn more

Small Business Administration loans are regulated by the Small Business Administration and exist to help companies with limited financial alternatives access funding at low-interest rates through federally backed lending.

Top 5 SBA Loan Banks in 2019:

Lender

Average Loan Amount

Maximum Amount

Wells Fargo

$298,550

$6,500,000

JP Morgan Chase

$203,635

$5,000,000+

Huntington National Bank

$185,237

$5,000,000

Live Oak Bank

$1,292,453

$5,000,000

TD Bank

$142,948

$5,500,000

Types of SBA Loans:

Loan Type

Purpose

SBA Micro Loan

Small capital loan of up to $50K.

SBA Export Loan

To finance business exports.

SBA 7a Loan

Working capital up to $5,000,000 for small businesses.

SBA Disaster Loan

For businesses that have been affected by a natural disaster.

SBA CAP Loan

For companies seeking a line of credit that can be used frequently.

SBA 504 Loan

Loans toward the purchase of commercial real estate.

FAQs:

Who qualifies for SBA loans?

SBA loans are designed for small businesses in any industry that need capital but are unable to qualify for traditional financing. An SBA loan might be able to help you take the next step.

Read more about SBA loans.

How much downpayment is required for an SBA loan?

You will require a 10% to 20% down payment, and some collateral. Some types of SBA loans doesn't need to be fully collateralized, and loans under $25,000 don't require any collateral.

Read more about SBA loans.

Are SBA loans hard to get?

They can be. Your business has a greater likelihood of being approved if it can put down 15-20% in cash against the loan. Many banks are reluctant to lend to small businesses with a poor credit score or companies that have little financial history.

Read more about SBA loans.

How does an SBA loan work?

SBA business loans, also known as small business association loans, are made possible by the federal government. The loan is obtained through a bank or another financial institution, but SBA guaranteed loans are backed by the government.

Read more about SBA loans.

What credit score is needed for a SBA loan?

It depends on the lender as they require different minimum credit scores. Typically, you need a minimum credit score of 640+, but the higher the better.

Read more about SBA loans.

How long does SBA approval take?

It depends on the lender but they generally take between 60 to 90 days.

How can I get approved for a SBA loan?

SBA loans require collateral for security, a personal guarantee of 20% or more of the business, and a good credit score. However, not all online lenders require collateral but they may require a personal guarantee.

How can I get a business loan without collateral?

Generally, business loans backed by the Small Business Administration (SBA) don't require collateral. In addition, you can try local government help, crowdfunding, and private lenders.

What can a SBA loan be used for?

SBA loans can be used for working capital and to purchase inventory, supplies, furniture, machinery, and equipment.

What is the advantage of an SBA loan?

  • Generous loan term lengths.
  • Caps on SBA interest rates.
  • Financing for up to 80 to 90 percent of costs.
  • Lower down payment requirements.
SBA lending

Which common businesses could benefit from SBA lending?

  • Restaurants.
  • General contractors.
  • Landscaping services.
  • Trucking/Logistics businesses.
  • Medical specialist offices.
  • Automotive repair shops.
  • Beauty salons.
  • Hotels.

What is a 7a loan?

The 7a loan program is one of the SBA’s most popular loans. Repayment can be made monthly to your bank, and you can qualify for up to $5,000,000 in loan funding. This is ideal for a new small business that doesn’t have the cash flow history to justify a traditional loan with their financial institution.

What is an SBA express loan application?

An SBA express loan is a fast-tracked application process whereby the lender will respond to your application within 36 hours. This may help you meet demanding financial deadlines. However, keep in mind the SBA loan rates might not be as favorable under such conditions.

Can I get an SBA disaster loan if my business is facing financial difficulty?

Yes. If your business has been affected by a natural disaster such as a hurricane or a flood, then you may be able to qualify for an SBA disaster loan. There’s no guarantee that you will meet all of the criteria, but these loans exist to help small businesses recover after a disaster strikes.You should contact your lender for more information and to find out if you qualify.

SBA Loan Calculator

How can I calculate SBA loan?

  • The amount of the loan your business is seeking.
  • The interest rate. Maximum rates are determined by the SBA, but your lender may offer a lower rate.
  • The SBA fee, which is paid up front by the lender and paid back by the borrower as a portion of the loan.

What are the SBA loan requirements and credit score that I must meet in order to qualify?

Each lender may have their own unique requirements, but the Small Business Administration requires the following of any borrower seeking a loan:

  • Be a for-profit business.
  • Do business in the U.S.
  • Have invested equity.
  • Exhaust all other financing options.

Are there SBA small business loans for minorities?

The SBA loan program is open to applicants from every demographic, but there are some lenders who offer SBA loans specifically for women and veterans in business. For example, the SBA loan for veterans allows military veterans to access up to $350,000 in loan funding with zero upfront fees. The SBA started this initiative as a way to support veterans who own and operate small businesses.

How can my business obtain an SBA loan?

  • You have to be a small business.
  • Determine how much funding you need and what it will be used for.
  • Shop around with several qualified SBA lenders to find the best possible rate.
  • You may need to consult a financial institution your business is already working with.

What documents do I need to apply for a SBA loan?

  • SBA borrower’s information forms.
  • Bank statements.
  • Balance sheet.
  • Profit and loss statements.
  • Business tax returns.
  • Personal tax returns.
  • Business plan.
  • Business debt schedule.
  • Business lease.