SBA Loan Programs: Finding the Right Fit for Your Business
What is an SBA Loan?
An SBA loan is a loan to help finance small businesses.
- SBA is an acronym for Small Business Administration
- SBA loans are issued by a bank or other financial institution directly to small businesses
- SBA loans are guaranteed by the US Small Business Administration
When most people think of SBA-guaranteed loans, they immediately think of the SBA 7(a) or SBA 504 programs. While these are the most well-known, the Small Business Administration (SBA) offers multiple loan programs designed to meet the diverse needs of entrepreneurs. The challenge is often figuring out where to go and how to access these resources.
Below is a breakdown of the different SBA loan programs, who supports them, and what they can be used for.
SBA 7(a) Loan Program: The Most Popular Choice
Supported by: Banks, credit unions, and SBA-approved non-bank lenders
Best for: General business financing, acquisitions, working capital, and real estate.
This is the most versatile loan program, providing funding for various business needs, from purchasing an existing business to covering operational expenses. It’s the go-to option for many small business owners looking for capital to grow.
SBA 504 Loan Program: Investing in Fixed Assets
Supported by: Certified Development Companies (CDCs) and commercial banks
Best for: Purchasing real estate, equipment, or large fixed assets with long-term, fixed-rate financing.
If you need to acquire property or high-value equipment to expand your business, the SBA 504 program offers long-term, low-interest financing structured to help you grow without excessive upfront costs.
SBA Microloan Program: A Boost for Startups and Small Businesses
Supported by: Nonprofit community-based organizations
Best for: Startups and small businesses needing smaller loans (up to $50,000), often paired with business training.
Not every business needs a massive loan. If you’re starting out and need a modest amount of capital to get off the ground, the SBA Microloan Program can be an excellent option. Plus, many lenders provide valuable mentoring and business training to set you up for success.
SBA Express Loans: Faster Access to Capital
Supported by: Banks and credit unions with SBA Express lending authority
Best for: Quick financing needs, with loans up to $500,000 and a reduced SBA guarantee.
For business owners who need faster turnaround times, the SBA Express Loan streamlines the application process, making it easier to secure funds when timing is critical.
SBA Community Advantage Program: Financing for Underserved Communities
Supported by: Mission-driven lenders, including Community Development Financial Institutions (CDFIs)
Best for: Businesses in underserved markets, offering loans up to $350,000.
If your business is in a traditionally underserved community, the SBA Community Advantage Program is specifically designed to help entrepreneurs who may not qualify for conventional financing.
SBA Export Loans: Fueling Global Business Expansion
Supported by: Banks, credit unions, and trade finance specialists
Best for: Small businesses looking to expand into international markets.
If you’re taking your business global, the SBA offers export-focused loan programs like Export Express, Export Working Capital, and International Trade Loans to help cover costs related to international expansion.
SBA Disaster Loans: Recovering from the Unexpected
Administered directly by: The SBA
Best for: Businesses and homeowners recovering from declared disasters.
Disasters can strike at any time, and when they do, SBA Disaster Loans provide much-needed relief to help businesses and individuals rebuild and recover.
Find the Right SBA Loan for You
With so many SBA loan programs available, choosing the right one depends on your business goals and financial needs. Whether you’re looking to finance a business acquisition, fund a real estate purchase, expand operations, or recover from a setback, there’s likely an SBA program that fits.
The key? Work with the right lending institution, whether it’s a bank, credit union, nonprofit organization, or specialized lender. If one lender declines your application, don’t be discouraged—other lenders may have different requirements and risk tolerances.
The SBA provides the guarantee, but it’s up to lenders to set their criteria—so shop around, ask questions, and find the best option for your business.