SBA loans are the gold standard of business loans. They come with high loan amounts, low interest rates, and long repayment terms. Due to the way each government loan program operates, the best SBA lenders will largely be unique to the specific program.
In this guide, we’ll break down the best SBA lenders for the most popular types of SBA loans—including the 7(a) loan program, microloan program, and CDC/504 loan program. We’ll also explain how to choose the right SBA lender for your business, plus review the basics of the application process and answer some frequently asked questions.
The Best SBA Lenders for the SBA 7(a) Loan Program
The SBA 7(a) loan is the most common SBA loan. With this program, you can borrow up to $5 million in funds for almost any purpose—including equipment and real estate purchases, working capital, basic startup costs, or even debt refinancing.
Below, we’ve listed the top SBA lenders within this program, with data on the loan volume and number of loans updated by the SBA as of December 31, 2020.
It’s important to note that all of these lenders are part of the SBA’s Preferred Lender Program. This means the SBA has authorized these lenders to approve applications for SBA funding without submitting the application to the SBA first. Working with a Preferred Lender will save you valuable time when searching for a business loan.
Based in Wilmington, North Carolina, Live Oak Bank does not have physical branches. This primarily online bank focuses on business loans, including SBA loans.
Live Oak offers a streamlined, electronic application for their SBA loan process and currently holds the spot for the top SBA 7(a) lender in the country by lending volume. In addition, Live Oak works with other SBA loan programs, including the 504, 504 Green program, and more.
The Huntington National Bank is a Midwest bank with more than 1,000 branches across eight states. They are consistently ranked as the top SBA lender in the Midwestern region and, as of Dec. 31, 2020, had approved the most 7(a) loans for the second-most volume.
Celtic Bank is one of the top SBA lenders, but this bank is a little different from most traditional banks. Celtic is a branchless bank and processes and underwrites loan applications completely online. This works in your favor because the Celtic Bank SBA loan process goes faster, and there’s no need to visit a branch in person.
Within the realm of business solutions, Newtek’s business loans are only one feature this company offers. This being said, Newtek provides both SBA loans and traditional term loans, as well as lines of credit.
Wells Fargo is an SBA lender that offers a variety of financing options for small businesses like lines of credit and commercial real estate financing. As of the last update of this article, Wells Fargo’s SBA loan approval count makes them the second-most active SBA lender for 7(a) loans.
KeyBank is a Cleveland, Ohio-based bank that offers SBA loans and has branches in the following states: Alaska, Colorado, Connecticut, Florida, Idaho, Indiana, Maine, Massachusetts, Michigan, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont, and Washington.
The last entry on our list of best SBA lenders is one of the biggest banks in the nation: JPMorgan Chase. Chase has more than 4,700 branches across the nation, but is less active than other SBA lenders. Along with a wide range of business loan products, Chase offers some great business credit cards.
Number of loans approved: 119
Total amount approved: $27,628,100
SBA microloans provide funding for entrepreneurs in need of less than $50,000. You can use microloans for a wide range of purposes, such as for purchasing equipment, working capital, or covering startup costs.
To provide microloans, the SBA partners with specially designated intermediary SBA lenders. These intermediaries are generally nonprofit, community-based organizations that have experience in lending. And as an added benefit, these SBA lenders usually provide management and technical assistance to small business owners—assuring that the money borrowed will be well spent.
The lenders that offer SBA microloans will vary depending on your location. To find an SBA microlender in your area, you can use the SBA’s personalized lender matching tool or check out the SBA’s list of approved intermediaries in each state.
Here is a list of the top 10 SBA microlenders by number of loans closed as of 2016, the most recently available data.
Number of microloans: 502
Microloan volume: $2,612,154
State: New York
Number of microloans: 291
Microloan volume: $1,137,503
Number of microloans: 290
Microloan volume: $1,890,135
State: New York
Number of microloans: 174
Microloan volume: $2,176,917
Number of microloans: 150
Microloan volume: $1,012,020
Number of microloans: 139
Microloan volume: $1,170,138
Number of microloans: 107
Microloan volume: $573,608
State: New York
Number of microloans: 103
Microloan volume: $2,525,136
Number of microloans: 101
Microloan volume: $575,105
Number of microloans: 99
Microloan volume: $1,930,164
SBA CDC/504 loans are loans specifically for the purchase or upgrade of real estate, equipment, and other fixed assets. With this program, you can borrow up to $20 million in funds.
Ranking the top CDC/504 lenders isn’t that easy because this loan actually comes from two lenders: an SBA-approved certified development company (CDC) and a bank. CDCs are usually nonprofit, community lenders and make 50% of the loan. Banks make 40% of the loan. And the remaining 10% is a down payment from the borrower.
The best bank and CDC lenders for SBA 504 loans vary significantly based on region. Regional SBA offices usually rank local CDCs and banks. For example, here’s a list from the mid-Atlantic region, one from Austin, Texas, and another from Los Angeles County. Over 270 CDCs exist nationwide and operate primarily in their state of incorporation.
However, you may find that many of the banks that are top SBA 7(a) lenders also offer loans within the CDC/504 program. Celtic Bank, for instance, which is the third most active 7(a) lender, also offers 504 loans. Additionally, Five Star Bank, based in California, also offers both 7(a) and 504 loans. Although not in the top 10 SBA lenders for 7(a) loans, Five Star does make the top 100 list for this program (and also works with Fundera, along with Celtic Bank).
If you’re looking for a CDC/504 lender near you, you can find one using the SBA’s CDC search tool.
If you approach a bank for financing, you can apply for a conventional business loan. If the bank participates in the SBA program, then you can apply for an SBA loan. In both cases, the bank is the lender. However, SBA loans come with a guarantee from the Small Business Administration (SBA) that they will repay the bank if the borrower defaults. In this way, SBA loans are more attractive for the lender and result in more favorable terms for the borrower.
On the whole, you’ll find that SBA loans can offer the longest terms, highest amounts, and lowest interest rates on the market, especially in comparison to alternative financing products from online lenders. This being said, although banks are the most popular kind of SBA lender (as well as the most active), nonprofit institutions and community-based lenders also issue SBA loans.
Although there is no set-in-stone method for deciding which SBA lender will be the best to work with, there are a few things you can keep in mind as you explore your options:
At the end of the day, there isn’t a cut-and-dried formula for finding the perfect SBA lender to work with.
Nevertheless, you can set your business up for success by researching the SBA lenders who participate in the program you’re applying to. You can also review your own qualifications, the lender’s application process, and the top lenders with each individual program, as we listed above.
By understanding all the options at your disposal, you’ll have a better idea of which SBA lender will work best for your business.
Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera.
Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending and financial management.