SBA Loan Programs: All 13 Programs, Explained

Learn all the types of SBA loans in this ultimate guide.
Editor's note: Fundera exists to help you make better business decisions. That’s why we make sure our editorial integrity isn’t influenced by our own business. The opinions, analyses, reviews, or recommendations in this article are those of our editorial team alone.

SBA Loan Programs: Get All the Details

SBA loan programs are the different setups through which the SBA facilitates small business lending. Though all SBA loan programs will offer affordable business funding, different SBA loan programs offer a variety of funding possibilities based on your business’s history, the amount of capital you need, and how you plan to use the funds.

Here’s a quick look into all of the available SBA loan programs:

  1. Standard 7(a) Loan Program. The SBA’s most popular and most general loan program, good for working capital.
  2. Microloan Program. Intended for smaller businesses who need up to $50,000 for working capital.
  3. CDC/504 Loan Program. The SBA’s version of a commercial real estate loan.
  4. 7(a) Small Loan. A 7(a) loan up to $350,000 that’s typically faster to fund.
  5. SBA Express Loan. SBA loans that come with a 36-hour approval turnaround time.
  6. SBA Export Express. SBA loans for businesses that need to finance export needs at a fast turnaround time.
  7. Export Working Capital. Short-term loans up to $5 million for export businesses.
  8. Veteran’s Advantage. SBA loans specifically for veterans, up to $350,000 in capital.
  9. CAPLines. The SBA’s version of a business line of credit.
  10. Home and Personal Property SBA Disaster Loans. Offer up to $200,000 for repairing personal property.
  11. Business Physical SBA Disaster Loans. Offer up to $2 million for repairing business property.
  12. Economic Injury SBA Disaster Loans. Funding for post-disaster slow business.
  13. Military Reservists Economic Injury SBA Disaster Loans. Loans for businesses with a key employed called for active duty.

In this guide, we look at the three primary SBA loan programs, plus 10 other sub-programs, and how they work to help you determine which one is the best fit for your business.

What Are SBA Loan Programs?

Though how an SBA loan works will vary from loan program to loan program, a hallmark of SBA loans is that they offer low-rate, long-term funding. SBA loans have some of the lowest interest rates that a business owner can find. And long repayment terms translate to manageable monthly payments. Plus, because most SBA loan programs will mean lessened risk for lenders in some form or fashion, SBA lenders lend more to small businesses. Together, participating lenders issued over $113 billion in SBA loans in the SBA’s fiscal 2017 year.

SBA loan programs have some drawbacks as well. Qualifying for an SBA loan is tough—these loans go only to the most creditworthy of borrowers. Plus, getting an SBA loan takes patience. The average loan processing time is 4 to 6 weeks, even with a specialist like Fundera helping you with your application. These loan programs are best for borrowers who don’t have an immediate need for funds (if you need capital right away, try other quick business loan options).

It’s also important to note that, while we go into the most popular SBA loan programs, there are many programs that the SBA offers for different entrepreneurs. They help facilitate SBA loans for women or Community Advantage Loans for specific locales.

Compare Your Loan Options

SBA Loan Programs: Details on All 13 of Your Options

Now that you understand the general mechanics of SBA loan programs, it’s time to get practical. Here are all the SBA loan programs made specifically to provide funding to small business owners:


The SBA 7(a) Loan Program

Most small business owners seeking an SBA loan start off with the 7(a) loan program. These loans accounted for more than 80% of the total volume of loans that the SBA guaranteed in 2017. 7(a) loans are general purpose small business loans, and you can use them for a wide variety of business purposes. Plus, the SBA 7(a) loan program contains within it a variety of different sub-programs to consider.

Since the 7(a) loan program—or one of the SBA loan programs within it—will be the obvious choice for the majority of business owners, let’s dig deeper into exactly how this loan program works, who it’s for, and how to proceed if you determine that this is the right SBA loan option for you.

SBA 7(a) Loan Program: How It Works

As with the vast majority of SBA loan programs, funding provided through the 7(a) loan program doesn’t actually come from the Small Business Administration. Rather, the borrowing process works similarly to a traditional bank loan, with the only difference being that the SBA acts as a guarantor to reduce the level of risk to lenders. Many large banks loan money as part of the 7(a) loan program, along with several community banks and some online banks.

SBA 7(a) Loan Program: Who It’s For

Since the 7(a) loan program offers so much flexibility in use of funds, it is far easier to narrow down the individual businesses or circumstances for which 7(a) loans are not a good fit.

You can’t use this SBA loan program to reimburse a business owner for outstanding expenses, to pay delinquent taxes, or to buy out one of your business owners.

Other than that, you’re good to go! General working capital. Purchasing a building or equipment. Paying the salaries of your employees until you turn a profit. Purchasing inventory or general supplies. Pretty much any expense you can think of can be covered by a loan from the 7(a) program. This is what makes the 7(a) loan program the default choice for most small business owners seeking funds through the US Small Business Administration.

To qualify for the 7(a) program, the small business owner must have a strong personal credit history (a FICO score of at least 650 is typical), and the business should have a solid financial record. You’ll also need to put up some collateral and sign a personal guarantee. Although new businesses can sometimes qualify, most successful applicants have been operating their businesses for two years or more.

SBA 7(a) Loan Program: Terms

Interest rates on 7(a) loans vary based on your intermediary lender as well as the size of your loan and repayment schedule. The SBA sets maximum interest rates that lenders can’t exceed. Subject to those maximums, individual lenders will determine the exact rate depending upon the applicant’s qualifications and the level of industry risk facing each business.

Those maximums vary from Prime + 2.25% to Prime + 4.75%. The Prime Rate is a market interest rate that serves as a benchmark for many types of loans. In addition to your interest rates, fees also affect your loan cost. The main fee on SBA 7(a) loans is the SBA guarantee fee, which goes up to 3.75% of the guaranteed amount of the loan.

You can learn more about the cost of 7(a) loans in our post on SBA loan rates. Since the SBA mandates the maximum interest rates on SBA loans, funds you obtain through the 7(a) loan program tend to carry some of the most affordable interest rates around.

Repayment terms range between 5 to 25 years on 7(a) loans depending on what you’re using the loan for. The longest terms are for real estate purchases, and the shortest terms are for working capital.

SBA 7(a) Loan Program: How to Apply

Several lenders participate in the 7(a) loan program. This includes large banks like Chase, Bank of America, and Wells Fargo, as well as smaller community banks. Whenever possible, apply through an SBA Preferred Lender. These lenders are authorized to make approval decisions without the SBA’s review, which speeds up the application process.

Your SBA loan application will require a lot of paperwork and details, so we recommend allowing at least six weeks for the application process before you need cash in hand. Online platforms like SmartBiz speed up the application process. A Fundera loan specialist can help you determine if you’re eligible for the SBA 7(a) loan program and put together your loan application.

See What You Qualify For

SBA 7(a) Sub-Programs

Within the umbrella of the 7(a) loan program, there are actually more SBA loan programs. Beyond the general 7(a) standard loan, there are different types of SBA loans for certain industries, financing needs, and entrepreneurial demographics. These SBA loan programs are less common than the standard 7(a) loan, but they could be a good fit for some businesses.

Here are the loan programs under the 7(a) loan umbrella.

Paper sheet
7(a) Small Loan

Loans up to $350,000. The SBA determines eligibility, and the turnaround time (5 to 10 days) is faster than the traditional 7(a) loan.

Paper sheet
SBA Express

Loans up to $350,000 with a faster turnaround time. These loans have a 36-hour turnaround for approval, but that means smaller loan amounts and higher interest rates. If you’re looking for the SBA’s Patriot Express Loan Program, it’s no longer active—but the SBA Express Loan is a good alternative to this program.

Paper sheet
Export Express

This program is for exporters looking for a streamlined method to obtain SBA-backed financing for loans up to $500,000. You’ll get an answer on approval in 24 hours.

Paper sheet
Export Working Capital

Export Working Capital loans, going up to $5 million, are for short-term loans for export businesses.

Paper sheet
Veterans Advantage

VA SBA Loans of up to $350,000 for veteran-owned businesses. These loans come with reduced fees on financing.

Paper sheet
CAPLines

The SBA’s line of credit programs designed to provide working capital and cash flow solutions for small business owners.


SBA CDC/504 Loan Program

The second of the SBA loan programs is the CDC/504 loan program. If you need significant funds to purchase or renovate land, buildings, or equipment, the CDC/504 loan program could be your perfect fit.

The terms, qualifications, and application process for this program are more complex than the more general 7(a) loans. Multiple parties are involved with making 504/CDC loans, making for a more time-intensive process. Plus, there’s typically more at stake here since 504/CDC loans have no set maximum and can cover huge multi-million dollar projects.

SBA CDC/504 Loan Program: How It Works

As we mentioned, CDC/504 loans have a somewhat complex structure:

  • A bank funds up to 50% of project costs.
  • A nonprofit certified development company (CDC) funds up 40% of project costs. These nonprofits are affiliated with the SBA and aim to create jobs and enhance development in their local economies.
  • The final 10% of project costs come from the borrower, most often in the form of a cash down payment.

It is important to understand that if you pursue of CDC/504 loan for your business, you are effectively seeking two separate loans—the CDC portion of the loan which is subject to SBA guidelines, and the bank portion which is not.

The exact process and terms, particularly of the CDC portion of your loan, can vary widely based on your geographic area and your local certified development company’s specific goals.

SBA CDC/504 Loan Program: Who It’s For

Since multiple parties are involved with 504/CDC loans and high dollar amounts are at stake, it is no wonder that these loans accounted for about 17% of total SBA-backed funds offered in 2017 but just 7% of the total number of loans. Compared with the other primary types of SBA loans, this one fits for a more specialized subset of small business borrowers.

Include a CDC/504 loan among your potential options if you’re seeking a commercial real estate property for which you plan to occupy at least 51% of the space. You should also consider a CDC/504 loan if you are planning renovations to your business or need to purchase equipment.

As with the 7(a) loan program, you need excellent personal credit (at least 650) to qualify for the SBA 504/CDC loan program. There is also a public policy aspect to the eligibility standards. You need to create or retain at least one job for every $65,000 of funding that the CDC provides. You can also meet other public policy goals. We recommend checking with your local CDC to determine whether your business will meet these standards before pursuing a 504 loan application.

SBA CDC/504 Loan Program: Terms

As we’ve mentioned, the CDC/504 loan is actually two separate loans, and that distinction extends to cost. Banks can charge their own interest rates on their portion of the loan, without any intrusion from the SBA. However, the SBA sets guidelines for the maximum interest rates on the CDC/504 loan. The CDC can only charged fixed interest rates. Those interest rates are currently around 5%. The repayment terms range between 10 to 25 years.

SBA CDC/504 Loan Program: How to Apply

Provided that you meet the criteria for a CDC/504 loan, you’ll want to first connect with a CDC in your local community to begin the application process. In some cases, your local CDC will be the one to secure your business loan. In other cases, the CDC may work in partnership with another SBA-approved lender.

Remember that if a CDC/504 loan does not turn out to be the right fit for your business, the 7(a) loan program can also be used to purchase fixed assets and make upgrades. That might end up being a more accessible choice.

See What You Qualify

The SBA Microloan Program

Small businesses with very high overhead or startup costs may seek SBA loans for hundreds of thousands or even millions of dollars. But other business owners need a much smaller amount to take the next major step in their business.

Banks are already reticent to loan money to small businesses in the first place, so many lending institutions won’t even entertain a business loan application for $50,000 or less. It is for exactly this reason that the SBA created the microloan program, which works with small, nonprofit intermediary lenders in local communities to fund loans under $50,000.

SBA Microloan Program: How It Works

Unlike the other types of SBA loans, the Microloan program stands out as the only one in which the funds for individual loans come directly from the SBA. Nonprofit intermediaries borrow up to $5 million at a time directly from the Small Business Administration, and then dole out that capital to individual borrowers according to their own qualification standards.

Although more limited than the other SBA loan programs, SBA microloans can be used for a relatively wide variety of purposes. For example, you can use these loans to purchase materials, pay staff, or pay for advertising or marketing. However, you cannot use an SBA Microloan to refinance debt or to purchase real estate.

SBA Microloan Program: Who It’s For

An SBA microloan can be a great option for any small business owner who would see a positive impact on their business from capital less than $50,000.

The exact qualification terms and minimum requirements vary among intermediary lenders, so you should check with your local intermediary to determine their exact application process and standards. However, you can generally expect that you will need a personal credit score of at least 600, and you will need to put up collateral on the loan and sign a personal guarantee.

As with any type of SBA loan, expect that you’ll need to present a well formulated business plan as part of your application. This is important for all SBA loan programs, but especially for newer businesses, which tend to apply for the Microloan program.

SBA Microloan Program: Terms

While borrowers can obtain up to $50,000 through this program, the average Microloan that the SBA funded in fiscal year 2017 was just $13,884. SBA Microloans have shorter terms compared to the other types of SBA loans. They carry terms of up to six years with interest rates between 6.5% and 13%. The average Microloan interest rate in the SBA’s 2017 fiscal year was 7.5%.

SBA Microloan Program: How to Apply

The SBA works through local intermediaries to make Microloans, so you’ll want to first find a local intermediary in your area and contact them to learn more about the application process and requirements.

Despite the smaller size of SBA microloans, you can expect the application process to be equally thorough. Getting loan approval and receiving the funds in your bank account can take several weeks. We suggest submitting your SBA microloan application as soon as possible, long before you have an immediate need.

See What You Qualify For

SBA Disaster Loan Program

Meant for businesses and homeowners in recovery, the SBA Disaster Loan Program provides low-cost financing for economic injury, mostly that which comes as a result of a natural disaster.

Like the SBA 7(a) loan program, the SBA Disaster Loan Program will have several loan programs within it.

Let’s take a look at the details:

SBA Disaster Loan Program: How It Works

This SBA loan program is unique not only in that it offers consumer lending, but also in that it offers direct SBA lending. This means that, through this SBA loan program, the SBA is lending its own capital straight to the borrower, rather than simply providing a guarantee or lending through an intermediary.

SBA Disaster Loan Program: Who It’s For

The SBA Disaster Loan Program offers affordable funding for businesses and homeowners recovering from a nationally-declared disaster. This loan program also provides funding to small businesses who have an essential employee who is a military reservist called for active duty.

SBA Disaster Loan Program: Terms

When you apply through this SBA loan program, the SBA will try to determine whether or not you have available credit elsewhere. If you do, your maximum interest rate will be 8%, but if you don’t the maximum interest rate on your SBA Disaster Loan will 4%.

Repayment term lengths for Disaster Loans can stretch as long as 30 years, which is lengthy, even relative to other SBA loan programs.

SBA Disaster Loan Program: How to Apply

To apply for funding through the SBA Disaster Loan program, you’ll need to register for a FEMA ID before you do anything else. Also ensure that your intended use of funds fulfills SBA stipulations before applying.

Small businesses apply for SBA Disaster funding will need the following documents:

  • SBA Form 5C
  • Contact information for all applicants
  • Social security numbers for all applicants
  • FEMA registration number
  • Deed or lease information
  • Insurance information
  • Income records
  • Account balances
  • Monthly expenses
  • IRS Form 4506-T

SBA Disaster Loan Sub-Programs

As mentioned, the SBA Disaster Loan Program has multiple loan programs within it. Each of the four SBA Disaster loan programs will address a slightly different need, so read closely:

Paper sheet
Home and Personal Property SBA Disaster Loans

Through this SBA loan program, you can apply to replace or repair your primary place of residence or your personal property. Borrowers can access up to $200,000 to repair their primary residence and up to $40,000 to repair personal property.

Paper sheet
Business Physical SBA Disaster Loans

This SBA loan program provides up to $2 million in funding for replacing or repairing the following business assets:

  • Real property
  • Machinery
  • Equipment
  • Fixtures
  • Inventory
  • Leasehold improvements
Paper sheet
Economic Injury SBA Disaster Loans

Perhaps your business didn’t sustain physical injury from a declared disaster, but it did see business slow down majorly. If this is the case, then the Economic Injury SBA Disaster Loan is the SBA loan program for you.

Paper sheet
Military Reservists Economic Injury SBA Disaster Loans

Finally, if a key employee is called for active duty, this SBA loan program was made just for you. You could be eligible for up to $2 million in funding to smooth out your cash flow while your team member serves.


SBA Loan Programs: The Bottom Line

Applying for an SBA loan certainly requires a high level of research and organization—both of which involves an investment of your time in order to succeed. But as long as you choose the right SBA loan program for your business, follow the proper steps to organize your loan application, and allow plenty of time for the approval and funding process, obtaining a loan through the Small Business Administration can be an excellent, low-cost financing option to move your business forward.