For the three main SBA loan programs, you don’t apply to the government. The SBA sets the rules and backs the loan or funds the lender, but a bank, development company or nonprofit lender is who you apply to, who decides and who you repay.
The three programs
| Loan | Apply with |
|---|---|
| 7(a), up to $5,000,000 | A participating lender |
| 504, up to $5,500,000 | A Certified Development Company and a senior lender |
| Microloan, up to $50,000 | A nonprofit intermediary |
7(a)
The SBA guarantees part of the loan, so the lender is more willing to say yes. You apply and work with the lender, not the SBA. It can pay for working capital, equipment, supplies, real estate or refinancing.
504
Long-term, fixed-rate financing for major fixed assets, made by an SBA-certified nonprofit Certified Development Company together with a senior lender. It can’t pay for working capital or inventory.
Microloans
The SBA funds nonprofit community lenders, who lend up to $50,000; the average is about $13,000. The lender makes every credit decision and sets the terms, including the rate.
Do this
- Know what the money is for. A building or major equipment points to 504. Working capital, equipment or supplies point to 7(a). A small amount to start points to a microloan.
- Find the lender, not the agency. Use the SBA’s Lender Match tool, ask your bank whether it makes SBA loans, or find a Certified Development Company or microlender near you.
- Get free help with the application from Small Business Development Centers, SCORE, Women’s Business Centers or Veterans Business Outreach Centers (find one).
- Check your state’s programs. Your state’s Fund it step lists any loan guarantees it runs.
Money from friends and family
Decide up front whether it’s a loan or a share of the business, and write it down. If someone gets a share, have an attorney handle the paperwork.
This step, state by state
Common questions
Does the SBA lend money directly to small businesses?
Not through its main loan programs. You apply with a participating lender (7(a)), a Certified Development Company (504) or a nonprofit intermediary (microloans).
What is the maximum SBA loan amount?
The 7(a) maximum is $5,000,000. The 504 maximum is $5,500,000. Microloans go up to $50,000.
How do I find an SBA lender?
Use the SBA's Lender Match tool, ask your bank, or contact your SBA district office. For a 504, find a Certified Development Company; for a microloan, an SBA-approved intermediary.
What is an SBA microloan?
A loan of up to $50,000 from a nonprofit community lender with SBA funding, averaging about $13,000. The lender decides and sets the terms.