SBA Small Business Loans: 2023 Review

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SBA small business loans are issued by private lenders like banks, CDFIs and nonprofit community lenders. But they’re backed by the federal government and can provide low-interest loans and lines of credit to many types of small business owners.

Lender Details

  • Moneybag

    Loan amount

    Varies; Up to $5.5 million

  • Rates

    Interest rate

    Varies; from 6.81 percent to 16.50 percent

  • Clock Wait

    Term lengths

    Varies; up to 25 years

  • Dollar

  • Business

Who SBA loans are best for

SBA loans are some of the most flexible and affordable loans around. From high loan amounts and long repayment periods to capped interest rates and options for historically marginalized communities, just about any business owner can benefit from using one of these government-backed loans. SBA loans can cover working capital, inventory, startup costs, expansion and more.

Who SBA loans may not be best for

If you have excellent credit and can qualify for business loans with the absolute lowest interest rates, you may not need to apply for an SBA loan. You also may want to look elsewhere if you need a fast business loan, as SBA loans can take 45 to 90 days to receive funds. 

SBA loans: in the details

Loan amount

Varies; Up to $5.5 million

Interest rate

Varies; from 6.81 percent to 16.50 percent

Term lengths

Varies; up to 25 years

Personal credit score


SBA loan pros and cons


  • Checkmark

    Capped interest rates

  • Checkmark

    Welcomes startups

  • Checkmark

    Welcomes borrowers with bad credit

  • Checkmark

    Helps underserved communities


  • Complicated and time-consuming application

Business loan types offered

The U.S. Small Business Administration (SBA) offers several loan programs to help small businesses. These loans have maximum interest rates, making it easy to see the highest rates a lender can charge ahead of time. The right type of SBA loan for you depends on factors like your credit score, time in business, financial statements and where your business is located.

  • Loan quick facts

    • Amounts: Up to $5 million
    • Terms: Varies: Up to 25 years for real estate; Up to 10 years for other purposes 
    • Interest rates: Up to 16.50% for fixed 7(a) loans and 15.00% for variable 7(a) loans

    SBA 7(a) loan overview

    SBA 7(a) loans are the most common type of SBA loan. This general-purpose business loan can cover a variety of business needs, including:

    • Working capital
    • Refinancing business debt
    • Real estate purchases or improvement

    Repayment terms for SBA 7(a) loans vary but can be far longer than many other loans that only have terms of five to seven years. You can take up to 25 years for 7(a) loans for real estate and up to 10 years when used as working capital loans or for inventory and equipment purchases.

    If a borrower defaults on an SBA 7(a) loan, the SBA guarantees to repay the lender up to 85 percent of loans of $150,000 or less and up to 75 percent of loans over $150,000. 

    Interest rates for all SBA 7(a) loans are the same. The SBA publishes maximum fixed rates on the SBA Fiscal Transfer Agent (FTA) wiki. These rates are based solely on your loan amount:

    • $25,000 or less: 16.50%
    • Greater than $25,000 and up to $50,000: 15.50%
    • Greater than $50,000 and up to $250,000: 14.50%
    • Greater than $250,000: 13.50%

    Maximum variable interest rates are published on the SBA website. These rates were based on the loan amount and whether the loan was repaid in seven years or longer but now are based solely on the loan amount:

    • $50,000 or less: Base rate (8.50%*) plus 6.50%
    • $50,001 to $250,000: Base rate (8.50%*) plus 6.00%
    • $250,001 to $350,000: Base rate (8.50%*) plus 4.50%
    • Greater than $350,000: Base rate (8.50%*) plus 3.00%

    Learn more about SBA 7(a) loans.

    *Prime rate accurate as of October 2023

    Loan quick facts

    • Amounts: Up to $5.5 million
    • Terms: Up to 25 years
    • Interest rates: From 6.81 percent to 7.08 percent

    SBA 504 loan overview

    SBA 504 loans (or CDC/504 loans) can be used for business growth and job creation as long as the funds are used to purchase or improve assets like real estate or long-term equipment. You won’t be able to use a 504 loan to cover short-term working capital costs. And you won’t be eligible if you are a nonprofit.

    To get an SBA 504 loan, you’ll have to work with a Certified Development Company. These SBA-certified nonprofits partner with third-party lenders like banks or credit unions. 

    The CDC finances up to 40 percent of approved costs, and the partner lender finances up to 50 percent. The remaining 10 percent is required equity the borrower must provide as a down payment. The down payment size could be higher if you are a startup business owner.

    Interest rates for SBA 504 loans are based on an increment above the current market rate for the 10-year U.S. Treasury rate. 

    Learn more about SBA 504 loans.

    Loan quick facts

    • Amounts: Up to $50,000
    • Terms: Up to 6 years
    • Interest rates: Typically 8.00% to 13.00% 

    SBA microloan overview

    The SBA microloan program offers up to $50,000 to small business owners looking to start or expand their businesses. According to the SBA, the average microloan size is $13,000. 

    Like the SBA 7(a) loan, these microloans can be used for just about any business-related need, like working capital, inventory and equipment. But you won’t be able to use funds to pay existing debt or purchase real estate.

    SBA microloans are provided by SBA-approved nonprofit, community-based lenders. These lenders have a track record of helping underserved communities. In 2022, over $82.6 million was provided to over 5,000 small businesses. According to an SBA press release, most of those loans (76 percent) went to minority small business owners.

    Learn more about SBA microloans.

    Loan quick facts

    • Amounts: Up to $500,000
    • Terms: Up to 10 years
    • Interest rates: Up to 16.50% for fixed 7(a) loans and 15.00% for variable 7(a) loans

    SBA Express loan overview

    SBA Express loans are a part of the SBA 7(a) loan program. Maximum loan amounts only go up to $500,000, and the SBA only guarantees up to 50 percent of the loan. But, lenders are able to skip the SBA review process, which can lead to faster funding compared to other types of SBA loans. 

    Learn more about SBA Express loans.

    Loan quick facts

    • Amounts: Up to $350,000
    • Terms: Varies: up to 25 years for real estate; up to 10 years for other purposes 
    • Interest rates: Up to 16.50% for fixed 7(a) loans and 15.00% for variable 7(a) loans

    SBA Community Advantage loan overview

    The SBA Community Advantage loan is currently a part of the SBA pilot loan program. It has features of the SBA 7(a) loan, with maximum loan amounts of $350,000 and repayment terms of 10 years for equipment, inventory and working capital and 25 years for real estate. 

    To participate in the program, lenders must provide at least 60 percent of approved Community Advantage (CA) loans to borrowers in underserved communities. These communities include:

    • Low-to-moderate income communities
    • Economically distressed communities
    • Promise Zones (high-poverty communities that receive assistance through partnerships with the federal government and local leaders)
    • Veteran-owned businesses
    • Opportunity Zones (Communities designated by the U.S. Department of Treasury, where the majority of residents are typically minorities)

    On September 30, 2023, the SBA began to phase out the SBA Community Advantage loan program. To continue offering CA loans, current CA lenders must apply to become Community Advantage Small Business Lending Companies. These new lenders will have the authority to provide regular SBA 7(a) loans to eligible businesses in underserved communities.

    Learn more about the SBA Community Advantage loan.

    Loan quick facts

    • Amounts: Up to $5 million
    • Terms: Varies: up to 10 years for most
    • Interest rates: Up to 16.50% for fixed 7(a) loans and 15.00% for variable 7(a) loans 

    SBA CAPLines overview

    SBA CAPLines are another type of SBA 7(a) loan with maximum loan amounts of up to $5 million and repayment terms of up to 10 years for most. They offer flexible working capital that can be used on an as-needed basis, with interest only being charged for the amount you use instead of the total amount you’re approved for. 

    There are four of these SBA business lines of credit. They may be revolving, which gives you the chance to replenish your credit limit as you repay what you use. Or they may be non-revolving, which means you won’t be able to re-use the credit line once you’ve repaid what you owe. 

    • Seasonal CAPLine: Revolving or non-revolving SBA business lines of credit that help small business owners who experience seasonal cash-flow issues.
    • Contract CAPLine: Revolving or non-revolving SBA business lines of credit used to cover expenses incurred with specific contracts.
    • Builders CAPLine: Builders and general contractors use this SBA line of credit to build or renovate residential or commercial properties.
    • Working CAPLine: Revolving SBA business lines of credit for small business owners with existing short-term assets that can be converted to cash to repay lenders. Repayment terms for this SBA line of credit are limited to five years.

    The SBA 7(a)loan program also includes:

    • Export Express: Term loans or lines of credit of up to $500,000 with repayment terms of up to seven years. Can be used to help businesses develop export capabilities.
    • Export Working Capital: Term loans of up to $5 million with repayment terms of 36 months that can be used to support export sales.
    • International Trade: Term loans of up to $5 million used to cover various costs of producing goods and services used for international trade

    Do you qualify? 

    Qualifying for an SBA loan depends on the type of loan you’re looking for and the lender you apply with. In general, to qualify for an SBA loan, there are a few eligibility requirements you must meet:

    • You must be a for-profit business with a physical location in the United States
    • Your business must show a reasonable ability to repay your loan
    • You must meet the specific requirements of the loan program you are applying for

    Some businesses won’t be able to qualify for an SBA loan. Some common types of businesses that are ineligible include:

    • Most nonprofit businesses
    • Businesses that focus primarily on lending
    • Businesses engaged in illegal activities
    • Speculative or unstable businesses

    What we like and what we don’t like

    SBA loans can help many small business owners looking for low-cost ways to help their businesses. But these loans aren’t a good fit if you need fast funding or prefer applying for a business loan with an easy application process.

    What we like 

    • Capped interest rates. These government-backed small business loans help small business owners who wouldn’t normally qualify for low-interest business loans.
    • Welcomes startups. So far, in 2023, over $9 billion in SBA 7(a) funding has gone to businesses that are under two years old — including businesses that haven’t even opened their doors.
    • Welcomes borrowers with bad credit. Some online SBA 7(a) lenders help business owners with personal credit scores as low as 600. Plus, some participating microlenders don’t have credit score requirements.
    • Helps businesses in underserved communities. From microloans and Community Advantage loans to SBA-approved mission-based lenders, the SBA continues to help historically disadvantaged communities.

    What we don’t like

    • Slow to fund. It can take 30 to 90 days to receive funding for an SBA loan, which may not work for fast-moving business opportunities, emergencies or cash flow shortages.
    • Complicated and time-consuming application. It can take hours or days to fill out all the required SBA forms and gather the required financial statements. It may take even longer if you don’t keep good records.

    How SBA loans compare to other types of loans

    SBA loans can be a great way to finance your small business. On top of the low interest rates and long repayment terms, SBA loans may come with counseling and training. But they’re not the best fit for every small business. 

    Where to find SBA loans

    There are a number of different lenders that offer SBA loans, including banks, credit unions and online lenders. You may also be able to get an SBA loan from a mission-based community lender, which can include for-profit or nonprofit lenders like Community Development Financial Institutions (CDFIs) or Minority Depository Institutions (MDIs). The best place to get an SBA loan will depend on your individual needs and circumstances.

    If you have an established business, good credit and a strong business plan, you may be able to get a low-interest SBA loan from a bank or credit union. CDFIs, MDIs and online lenders are likely a better fit for startup businesses, people with bad credit or business owners who are part of groups that have historically lacked access to capital from traditional lenders. This may include women, minority business owners, veterans, refugees or businesses located in low-income communities. 

    When you’re looking for an SBA loan, it’s important to compare rates and terms from different lenders. You may also want to check to see if the lender you choose is a member of the SBA’s Preferred Lender Program. This program ensures that lenders meet certain standards for customer service and loan origination. SBA Preferred Lenders also have more authority to approve SBA loans, which can lead to a faster loan approval process.

    Here’s a look at the current top SBA lenders and lenders with relaxed eligibility requirements that may help startups and business owners with bad credit. 

    How to apply for a loan with the U.S. Small Business Administration 

    The U.S. Small Business Administration doesn’t directly provide SBA loans to small business owners unless it’s for disaster assistance. It instead partners with banks, credit unions and other financial institutions.

    To apply for an SBA loan, you’ll need to submit a loan application to a participating lender. The application will include information about your business, financial situation and loan needs.

    Once you’ve submitted your application, the lender will review it and decide whether to approve you for a loan. If approved, the lender will then work with the SBA to finalize the loan terms. 

    Depending on your lender and the type of loan, here is a look at some of the common types of forms and statements you’ll need to provide along with your application.


    Bankrate Insight

    SBA loan frequently asked questions

    How Bankrate rates SBA loans

    Overall Score 4.8
    Accessibility 4.2 SBA’s ability to work with all types of lenders gives it wide access to help many small businesses.
    Affordability 4.7 SBA loans offer low-interest loans to many businesses — even startups and bad credit borrowers.
    Transparency 5.0 These government-backed loans try to make it easy for borrowers to understand maximum rates and fees.
    Customer experience 5.0 Varies by lender. Despite the long time to fund and intense application process, approved borrowers appreciate having access to low-interest financing.
    Flexibility 5.0 SBA loans have multiple loans, flexible repayment terms and unique options like microloans that can help refugees and borrowers with little-to-no credit.



    data points collected

    To select the top small business lenders, Bankrate considers more than 20 factors. These factors include loan amounts, approval and funding times, credit requirements, APR or factor rate ranges, fees, and easy-to-find rate and fee disclosures. Bankrate reviewed more than 30 lenders and gave each a rating, which consists of five categories:

    • Accessibility: Factors considered in this category include minimum loan amounts, approval and funding speed, minimum annual revenue and minimum credit score.
    • Affordability: This section measures interest or factor rates and fees.
    • Transparency: How easy it is to find important rates, fees and eligibility requirements are considered in this category.
    • Customer experience: Customer service hours, online applications and app availability are considered in this category.
    • Flexibility: This category considers factors like the number of loan products and ability to change payment due date.

    Editorial disclosure: All reviews are prepared by staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.

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