Key takeaways
- SBA loans are made by banks and other lenders but partly guaranteed by the U.S. Small Business Administration, which lowers lender risk.
- The flagship 7(a) loan goes up to $5 million; SBA Express up to $500,000; 504 loans fund real estate and equipment; microloans go up to $50,000.
- With prime at 7.00%, 7(a) rates are capped at 10%–13.5% (variable) or 12%–15% (fixed), depending on loan size.
- Since March 1, 2026, every owner of a 7(a) or 504 applicant must be a U.S. citizen or national.
SBA loans are small business loans from banks, credit unions and other lenders that the U.S. Small Business Administration partly guarantees. That guarantee lets lenders offer lower capped rates and longer terms, up to 10 years for most 7(a) loans and 25 years for real estate, than most business borrowers could get otherwise. The trade-off is more paperwork and a slower process.
For many small businesses, an SBA loan is the cheapest long-term financing available outside a traditional bank loan with heavy collateral. This guide compares the main programs, shows what current rate caps and fees mean in dollars and walks through how to apply.
SBA loan programs compared
Rates and terms checked: Nov. 11, 2026. They change often, so confirm with the provider before you apply. How we review lenders
| Program | Maximum | Best for | Typical term |
|---|---|---|---|
| 7(a) standard | $5 million | Working capital, expansion, buying a business, refinancing | Up to 10 years (25 for real estate) |
| SBA Express | $500,000 | Faster decisions on smaller loans and lines of credit | Up to 10 years for term loans |
| 504 | SBA portion generally up to $5 million ($5.5 million for some manufacturing and energy projects) | Buying real estate or major equipment | 10, 20 or 25 years |
| Microloan | $50,000 | Startups and very small businesses | Up to 7 years |
SBA loan rates in November 2026
The SBA caps how much lenders can charge above the prime rate, which is 7.00% with the Fed’s target range at 3.75%–4.00% after its Oct. 28, 2026 meeting. Smaller loans are allowed higher margins.
| 7(a) loan size | Max variable rate | Max fixed rate |
|---|---|---|
| $25,000 or less | 13.5% (prime + 6.5%) | 15% (prime + 8%) |
| $25,001–$50,000 | 13.5% (prime + 6.5%) | 14% (prime + 7%) |
| $50,001–$250,000 | 13% (prime + 6%) | 13% (prime + 6%) |
| $250,001–$350,000 | 11.5% (prime + 4.5%) | 12% (prime + 5%) |
| Over $350,000 | 10% (prime + 3%) | 12% (prime + 5%) |
The SBA posts the exact maximum fixed rate for each month on its lender website, so confirm the current cap with your lender before you sign. 504 loans carry long-term fixed rates pegged to a margin above the 10-year Treasury yield, which was 4.98% on Oct. 29, 2026. Microloan rates are set by the nonprofit intermediary lender; the SBA says they typically run about 8% to 13%.
Guarantee fees for fiscal year 2027
For 7(a) loans with terms over 12 months approved from Oct. 1, 2026 through Sept. 30, 2027, the upfront guarantee fee is a percentage of the SBA-guaranteed portion:
- $150,000 or less: 2%
- $150,001–$700,000: 3%
- $700,001–$5 million: 3.5% on the first $1 million guaranteed, plus 3.75% above that
- Fee waivers: 0% on loans of $700,000 or less to manufacturers, certain food supply-chain businesses and businesses in rural areas, and $0 on SBA Express loans to veteran-owned businesses.
The SBA typically guarantees 85% of loans of $150,000 or less and 75% of larger loans (50% for Express). The fee can usually be financed into the loan.
Rate watch: most 7(a) loans are variable and move with prime. A 1-point Fed cut or hike changes your rate by about the same amount. Read what the latest Fed decision means for borrowers.
What an SBA loan costs: worked examples
A $150,000 working-capital loan
A 10-year 7(a) loan for $150,000 at the 13% variable cap costs about $2,240 a month and roughly $118,760 in total interest if the rate never changes. At 11%, the payment falls to about $2,066 and interest to about $97,950. The SBA guarantees 85%, or $127,500, so the FY2027 guarantee fee is 2% of that: $2,550.
A $1 million building through the 504 program
A typical 504 deal splits the cost three ways: a bank first mortgage for 50% ($500,000), the SBA-backed CDC loan for 40% ($400,000) and your down payment of 10% ($100,000). At an illustrative 8% on the bank piece and 6.5% on the CDC piece, both over 25 years, payments are about $3,859 and $2,701 a month. That’s about $6,560 combined, with only 10% down instead of the 20% to 30% a conventional commercial mortgage often requires.
A $30,000 microloan
At 10% over six years, a $30,000 microloan costs about $556 a month and about $10,016 in total interest.
Estimate your own payments with the loan calculator.
Who qualifies?
- A for-profit business operating in the U.S. that meets SBA size standards.
- Owners who have invested their own money; startups and business purchases generally need an equity injection of at least 10%.
- Every direct and indirect owner must be a U.S. citizen or national living primarily in the U.S. (for applications on or after March 1, 2026). Lawful permanent residents can no longer hold any stake in a 7(a) or 504 borrower; the same standard reached microloans on April 1, 2026.
- Unable to get comparable credit elsewhere on reasonable terms (the “credit elsewhere” test).
- Good personal credit and a clean repayment history. See our credit score guide.
- Enough cash flow to repay; lenders often want a debt service coverage ratio of about 1.25 or higher.
Documents you’ll need
- Business and personal tax returns (usually two to three years).
- Year-to-date profit-and-loss statement and balance sheet.
- Business plan and how you’ll use the money, with projections for startups.
- Debt schedule listing current business debts.
- Ownership documents, licenses and any leases.
- Personal financial statement for each owner of 20% or more.
How to apply for an SBA loan
- Pick the right program for your purpose and amount.
- Find an SBA lender: your bank, a credit union or the SBA’s Lender Match tool. For 504 loans you’ll work with a bank and a Certified Development Company.
- Prepare your documents before you apply so underwriting isn’t held up.
- Submit and respond quickly to lender questions.
- Close and fund. Express loans can move in days to weeks; standard 7(a) and 504 loans often take 30 to 90 days.
Why SBA applications stall
- Tax returns that don’t match the financial statements you submitted.
- Unexplained dips in revenue or large owner withdrawals in recent bank statements.
- Missing personal financial statements or guarantees from 20% owners.
- Ownership records that don’t show who holds what percentage, which now matters for the citizenship rule.
- Unfiled taxes or delinquent federal debt, which generally must be resolved first.
Fixing these before you apply is the single best way to shorten the timeline.
SBA loans vs. other business financing
| SBA loan | Online lender | Bank loan | |
|---|---|---|---|
| Cost | Low to moderate; capped | Often high | Low |
| Speed | Weeks | 1–3 days | Weeks |
| Down payment / collateral | Low down payment; collateral taken when available | Usually none, but personal guarantee | Often significant collateral |
| Requirements | Moderate; lots of paperwork | Easiest | Strictest |
Compare alternatives in online business loans, unsecured business loans, lines of credit and commercial loans.
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Frequently asked questions
Can a startup get an SBA loan?
Yes, but it’s harder. Microloans and some 7(a) lenders work with startups that have strong owner credit, industry experience, a solid plan and a cash injection, generally at least 10% of the project.
Do SBA loans require collateral?
Lenders aren’t required to take collateral on 7(a) loans of $50,000 or less. On larger loans they generally take available business and sometimes personal assets, but the SBA doesn’t decline a loan solely for lack of collateral.
Can green card holders get SBA loans?
Not for new 7(a) or 504 loans. Since March 1, 2026, 100% of owners must be U.S. citizens or nationals. Existing loans aren’t affected.
Does the SBA lend money directly?
Mostly no. The SBA guarantees loans made by approved lenders. Disaster loans are the main exception.
How long does SBA approval take?
Express decisions can come within days; full approval and funding for standard 7(a) and 504 loans usually takes several weeks to a few months.
Updated November 11, 2026: sources refreshed with provider and official data.
Sources: U.S. Small Business Administration program pages for 7(a), 504 and microloans and the 7(a) terms, conditions and eligibility page (maximum variable rates, loan limits and maturities, checked Nov. 11, 2026); SBA SOP 50 10 8 (maximum fixed-rate spreads); SBA Information Notice 5000-881797, FY 2027 7(a) program fees (effective Oct. 1, 2026); SBA policy notice on citizenship requirements (effective March 1, 2026); Federal Reserve H.15 prime rate after the Oct. 28, 2026 FOMC meeting and 10-year Treasury yield (Oct. 29, 2026). Calculations by FinInfoBlog. Lenders may set stricter requirements; verify current terms at SBA.gov. This article is for educational purposes and isn’t financial or legal advice.
Written by Chanchala
Founder & Lead Writer · B.Sc. Mathematics (Honors) · 9 years in banking & lending
Chanchala is the founder and lead writer of FinInfoBlog. She holds a B.Sc. in Mathematics (Honors) and has 9 years of experience in banking and lending. She writes plain-English guides on savings, CDs, loans, credit and personal finance for U.S. readers, and makes sure every example shows the math behind the money decision. How we research and fact-check.