SBA Loans: Compare Government-Backed Business Financing
SBA loans are made by participating lenders and partially guaranteed by the U.S. Small Business Administration. The guarantee can let lenders offer longer repayment terms and more favorable terms than many alternatives, though approval standards and paperwork are often more demanding.
Common uses
- Working capital and expansion (7(a))
- Purchasing owner-occupied real estate or major equipment (504)
- Refinancing eligible business debt
- Buying or acquiring a business
General qualification criteria
| Criteria | General expectation |
|---|---|
| Personal credit | Often in the mid-600s or higher; stronger credit improves terms |
| Business credit and history | Clean payment history; no recent bankruptcies or defaults on government-backed debt |
| Time in business | Often two or more years; some lenders consider newer businesses with strong owners |
| Cash flow | Enough income to cover debt payments, commonly a debt service coverage ratio of about 1.15 to 1.25 or higher |
| Collateral and equity | Lenders typically take available collateral on larger loans; owners usually invest their own equity |
| Eligibility | For-profit business operating in the U.S. that meets SBA size standards; owners with 20% or more typically provide a personal guarantee |
These are general, commonly cited guidelines and not guarantees. Each provider sets its own requirements, and meeting them does not ensure approval.
What providers typically look for
- Time in business and annual revenue (minimums vary by lender)
- Personal and business credit profile
- Recent business bank statements and tax returns
- Business formation documents and ID
- A business plan or financial projections for some programs
Requirements vary by provider.
Pros
- Long repayment terms can lower monthly payments
- Often among the lower-cost options for qualified borrowers
- Flexible uses
Cons
- Slower process and more documentation
- Stricter eligibility
- Collateral or personal guarantees may be required
Compare lenders
Offers SBA loans, term loans and business lines of credit. Compare terms and requirements.
View SmartBiz LoansBusiness funding provider. Submitting its form shares your contact information with the company.
View Big Think CapitalOffers term, SBA, equipment and credit line options. Compare terms and requirements.
View South End CapitalAffiliate links: we may earn a commission if you apply or are approved, at no extra cost to you. Approval is not guaranteed. Review each provider’s terms and fees before accepting an offer.
Frequently asked questions
What is the difference between SBA 7(a) and 504 loans?
7(a) loans are the SBA’s general-purpose program for working capital, equipment, real estate and more. 504 loans are designed for major fixed assets such as owner-occupied real estate and long-lived equipment. Program details and limits change, so confirm current terms with a lender or sba.gov.
How long does an SBA loan take?
Timelines vary by lender and loan type. Expect longer than most online lenders because of documentation and underwriting.
Do I need collateral?
Often, yes. Requirements depend on the lender and loan size.
Other financing options
Small Business Loans · Business Lines of Credit · Equipment Financing · Business Credit Cards
Epic Capital Solutions is not a lender, broker or issuer and does not make credit decisions. Information is general and not financial, legal or tax advice. Rates, fees and terms are set by providers and may change.