Vector of a shield with a dollar sign. Represents the SBA loan program.

How to Get an SBA Loan

Founded in 1953, the U.S. Small Business Administration (SBA) has been a cornerstone of American entrepreneurship, helping businesses start, build, and grow. As an independent agency, the SBA partners with public and private organizations to offer a range of services, including invaluable and accessible loan programs.

In this comprehensive guide to SBA loans, we’ll explore the different types of SBA loans, what lenders are looking for, and how to navigate the application process. We’ll also delve into resources around disaster loans, ensuring you’re prepared no matter what comes your way.

What is an SBA loan?

An SBA Loan is not a direct loan from the SBA itself. It’s a loan that has been made by a commercial lending partner (like a bank or credit union), but that the SBA has guaranteed for these partners and that has been structured according to SBA requirements. This helps to minimize the risk for both partners and borrowers. Typically, only those without reasonable access to other funding sources are eligible for such a loan.

Because loan guarantee requirements and practices are dependent on the US Government, changes to policies or economic conditions may change lending terms.

You can apply for an SBA Loan if you are part of a U.S. territory including the United States, Puerto Rico, Guam, and the U.S. Virgin Islands. If you are not part of any of these territories, there are a number of other funding opportunities available.

Introduction to the SBA loan program

Check out these resources to learn the basics about the types of SBA loans, what you can use them for, and how to apply.

SBA disaster loan resources

This, of course, is a category that business owners never hope to find themselves in. Unfortunately, circumstances are not always in our control or favor, and the time may come when you need a loan to rebuild your business after a disaster. 

Check out our disaster loan resources to get to know this specific loan program.

SBA loan templates and tools

Resources to help you prepare to apply for an SBA loan and pitch to lenders.

SBA loans FAQ

An SBA loan is a small business loan partially guaranteed by the U.S. Small Business Administration. This guarantee encourages lenders to offer loans to small businesses that they may otherwise consider too risky.

Obtaining an SBA loan can be challenging as they often require strong credit scores, a solid business plan, and sometimes collateral. However, with thorough preparation and a compelling business proposition, they are certainly attainable. It’s worth connecting with a representative from your local SBDC for additional information and guidance through the application process.

The SBA Microloan program, offering loans up to $50,000, is often considered the easiest to qualify for, especially for newer businesses or those with less established credit histories.

Not everyone qualifies for an SBA loan. Eligibility depends on factors such as the nature of the business, its size according to SBA standards, the business owner's creditworthiness, and the ability of the business to repay the loan.

Factors that can disqualify you include poor personal or business credit, a recent bankruptcy, being delinquent on existing debt to the government, or operating a non-eligible type of business.

Yes, they need to be repaid. They are not grants. The repayment terms depend on several factors, including the amount borrowed, the purpose of the loan, and the terms agreed upon with the lender.

The amount you can borrow depends on the loan type. For instance, under the 7(a) program, you can borrow up to $5 million, while microloans are capped at $50,000. The SBA's 504 loans can also go up to $5 million, or even $5.5 million for certain businesses.