Under the U.S. Small Business Administration’s various “SBA loan” programs, you can borrow money for nearly any business purpose—including adding to working capital, purchasing inventory or equipment, refinancing other debts, buying real estate, or even funding the acquisition of other businesses.

SBA’s Role
SBA provides a number of financial assistance programs for small businesses that have been specifically designed to meet key financing needs, including debt financing, surety bonds, and equity financing.

From starting up or expanding your business to recovering from disasters, SBA loan programs are available to help your business succeed.

You can explore various types of loans that may be available to you, including: 7(a) loans, which are part of SBA’s most common program; real estate and equipment loans; disaster recovery and even exporting!

It’s important to understand SBA’s role – the agency doesn’t lend the money directly to entrepreneurs to start or grow a business, but sets the guidelines for loans that made by its partners (lenders, community development organizations and micro-lending institutions). SBA guarantees that these loans will be repaid, which eliminates some of the risk to the lending partners.

Check out the resources here on to gain insight about the financing options you have throughout your business ventures, along with information about loan credit factorshow to prepare your loan application and a helpful checklist.

And when you’re ready, find SBA lenders in your area with this search tool. Discover the size and types of loans being provided, then contact one of the Lender Relations Specialists listed to learn how you can get started.

  • General Small Business Loans: 7(a)

    Loan Program Eligibility
    SBA provides loans to businesses; so the requirements of eligibility are based on specific aspects of the business and its principals. As such, the key factors of eligibility are based on what the business does to receive its income, the character of its ownership and where the business operates.

    SBA generally does not specify what businesses are eligible. Rather, the agency outlines what businesses are not eligible.  However, there are some universally applicable requirements. To be eligible for assistance, businesses must:

    • Operate for profit
    • Be small, as defined by SBA
    • Be engaged in, or propose to do business in, the United States or its possessions
    • Have reasonable invested equity
    • Use alternative financial resources, including personal assets, before seeking financial assistance
    • Be able to demonstrate a need for the loan proceeds
    • Use the funds for a sound business purpose
    • Not be delinquent on any existing debt obligations to the U.S. government

    Ineligible Businesses
    A business must be engaged in an activity SBA determines as acceptable for financial assistance from a federal provider. The following list of businesses types are not eligible for assistance because of the activities they conduct:

    • Financial businesses primarily engaged in the business of lending, such as banks, finance companies, payday lenders, some leasing companies and factors (pawn shops, although engaged in lending, may qualify in some circumstances)
    • Businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds (except when the property is leased to the business at zero profit for the property’s owners)
    • Life insurance companies
    • Businesses located in a foreign country (businesses in the U.S. owned by aliens may qualify)
    • Businesses engaged in pyramid sale distribution plans, where a participant’s primary incentive is based on the sales made by an ever-increasing number of participants
    • Businesses deriving more than one-third of gross annual revenue from legal gambling activities
    • Businesses engaged in any illegal activity
    • Private clubs and businesses that limit the number of memberships for reasons other than capacity
    • Government-owned entities
    • Businesses principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs, whether in a religious or secular setting
    • Consumer and marketing cooperatives (producer cooperatives are eligible)
    • Loan packagers earning more than one third of their gross annual revenue from packaging SBA loans
    • Businesses in which the lender or CDC, or any of its associates owns an equity interest
    • Businesses that present live performances of an indecent sexual nature or derive directly or indirectly more 2.5 percent of gross revenue through the sale of products or services, or the presentation of any depictions or displays, of an indecent sexual nature
    • Businesses primarily engaged in political or lobbying activities
    • Speculative businesses (such as oil exploration)

    There are also eligibility factors for financial assistance based on the activities of the owners and the historical operation of the business. As such, the business cannot have been:

    • A business that caused the government to have incurred a loss related to a prior business debt
    • A business owned 20 percent or more by a person associated with a different business that caused the government to have incurred a loss related to a prior business debt
    • A business owned 20 percent or more by a person who is incarcerated, on probation, on parole, or has been indicted for a felony or a crime of moral depravity

    Special Considerations
    Special considerations apply to some types of businesses and individuals, which include:

    • Franchises are eligible except when a franchiser retains power to control operations to such an extent as to equate to an employment contract; the franchisee must have the right to profit from efforts commensurate with ownership
    • Recreational facilities and clubs are eligible if the facilities are open to the general public, or in membership-only situations, membership is not selectively denied or restricted to any particular groups
    • Farms and agricultural businesses are eligible, but these applicants should first explore Farm Service Agency (FSA) programs, particularly if the applicant has a prior or existing relationship with FSA
    • Fishing vessels are eligible, but those seeking funds for the construction or reconditioning of vessels with a cargo capacity of five tons or more must first request financing from the National Marine Fisheries Service
    • Privately owned medical facilities including hospitals, clinics, emergency outpatient facilities, and medical and dental laboratories are eligible; recovery and nursing homes are also eligible, provided they are licensed by the appropriate government agency and they provide more than room and board
    • An Eligible Passive Company (EPC) must use loan proceeds to acquire or lease, and/or improve or renovate, real or personal property that it leases to one or more operating companies and must not make any profit from conducting its activities
    • Legal aliens are eligible; however, consideration is given to status (e.g., resident, lawful temporary resident) in determining the business’ degree of risk
    • Probation or parole:  Applications will not be accepted from firms in which a principal is currently incarcerated, on parole, on probation or is a defendant in a criminal proceeding


  • Microloan Program

    The Microloan program provides loans up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000.

    The U.S. Small Business Administration provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries administer the Microloan program for eligible borrowers.

    Eligibility Requirements
    Each intermediary lender has its own lending and credit requirements. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner.

    Use of Microloan Proceeds
    Microloans can be used for:

    • Working capital
    • Inventory or supplies
    • Furniture or fixtures
    • Machinery or equipment

    Proceeds from an SBA microloan cannot be used to pay existing debts or to purchase real estate.

    Repayment Terms, Interest Rates, and Fees
    Loan repayment terms vary according to several factors:

    • Loan amount
    • Planned use of funds
    • Requirements determined by the intermediary lender
    • Needs of the small business borrower

    The maximum repayment term allowed for an SBA microloan is six years.

    Interest rates vary, depending on the intermediary lender and costs to the intermediary from the U.S. Treasury. Generally, these rates will be between 8 and 13 percent.

    Application Process Microloans are available through certain nonprofit, community-based organizations that are experienced in lending and business management assistance. If you apply for SBA microloan financing, you may be required to fulfill training or planning requirements before your loan application is considered. This business training is designed to help you launch or expand your business.

    Find a Microloan Provider To apply for a Microloan, you must work with an SBA approved intermediary in your area. Approved intermediaries make all credit decisions on SBA microloans. For more information, you can contact your local SBA District Office or view the list of Participating Microloan Intermediary Lenders in the Attachments list below.

  • Real Estate & Equipment Loans: CDC/504

    The CDC/504 Loan Program provides financing for major fixed assets such as equipment or real estate.

    · CDC/504 Loan Program Eligibility
    To be considered for a Certified Development Company/504 loan, applicants must meet certain eligibility requirements.

    · Use of CDC/504 Loan Proceeds
    What CDC/504 loans can and cannot be used for.

    · CDC/504 Loan Amounts, Interest Rates & Fees
    Learn about CDC/504 loan amounts, repayment terms, interest rates and fees.

    · CDC/504 Loan Application Process
    Once you have decided to apply for a loan guaranteed by the SBA, you will need to collect the appropriate documents for your application.

    CDC/504 Loan Program Eligibility
    To be considered for Certified Development Company(CDC)/504 loan, applicants must meet these eligibility requirements: 

    • Operate as a for-profit company 
    • Do business (or propose to) in the United States or its possessions 
    • Has a tangible net worth less than $15 million and an average net income less than $5.0 million after taxes for the preceding two years.
    • Loans cannot be made to businesses engaged in speculation or investment in rental real estate.

    CDC/504 Loan Application Process
    Once you have decided to apply for a loan guaranteed by the SBA, you will need to collect the appropriate documents for your application. The SBA does not provide direct loans. The process starts with your local lender, working within SBA guidelines.

    Use the checklist below to ensure you have everything the lender will ask for to complete your application. Once your loan package is complete, your lender will submit it to the SBA. 

    1. SBA Loan Application – To begin the process, you will need to complete an SBA loan application form. Access the most current form here: Application for Business Loan – SBA Form 1244.
    2. Personal Background and Financial Statement – To assess your eligibility, the SBA also requires you complete the following forms:
    1. Business Financial Statements – To support your application and demonstrate your ability to repay the loan, prepare and include the following financial statements:
    • Profit and Loss (P&L) Statement – This must be current within 90 days of your application. Also include supplementary schedules from the last three fiscal years.
    • Projected Financial Statements – Include a detailed, one-year projection of income and finances and attach a written explanation as to how you expect to achieve this projection.
    1. Ownership and Affiliations – Include a list of names and addresses of any subsidiaries and affiliates, including concerns in which you hold a controlling interest and other concerns that may be affiliated by stock ownership, franchise, proposed merger or otherwise with you.
    2. Business Certificate/License – Your original business license or certificate of doing business.   If your business is a corporation, stamp your corporate seal on the SBA loan application form.
    3. Loan Application History – Include records of any loans you may have applied for in the past.
    4. Income Tax Returns – Include signed personal and business federal income tax returns of your business’ principals for previous three years.
    5. Résumés – Include personal résumés for each principal.
    6. Business Overview and History – Provide a brief history of the business and its challenges. Include an explanation of why the SBA loan is needed and how it will help the business.
    7. Business Lease – Include a copy of your business lease, or note from your landlord, giving terms of proposed lease.
    8. If You are Purchasing an Existing Business – The following information is needed for purchasing an existing business:
    • Current balance sheet and P&L statement of business to be purchased
    • Previous two years federal income tax returns of the business
    • Proposed Bill of Sale including Terms of Sale
    • Asking price with schedule of inventory, machinery and equipment, furniture and fixtures
    • Be an eligible type of business. While the vast majority of businesses are eligible for financial assistance from the SBA, some are not. Check this list of eligible and ineligible types of businesses to see if your company qualifies.
    • Under the 504 Program, Plan to use proceeds for an approved purpose. CDC/504  loan proceeds may be used for the financing of fixed assets like real estate or equipment. This list explains Eligible and Ineligible Use of Proceeds.
    • Not have funds available from other sources. SBA does not extend financial assistance to businesses when the financial strength of the individual owners or the company itself is sufficient to provide all or part of the financing. Both business and personal financial resources are reviewed as part of the eligibility criteria. If these resources are found to be excessive, the business will be required to use those resources in lieu of part or all of the requested loan proceeds.
    • Ability to repay the loan on time from the projected operating cash flow of the business
    • Good character. SBA obtains a “Statement of Personal History” from the principals of each applicant firm to determine if they have historically shown the willingness and ability to pay their debts and whether they have abided by the laws of their community
    • Relevant management expertise
    • Feasible business plan

    Use of CDC/504 Loan Proceeds
    A 504 loan can be used for:

    • The purchase of land, including existing buildings
    • The purchase of improvements, including grading, street improvements, utilities, parking lots and landscaping
    • The construction of new facilities or modernizing, renovating or converting existing facilities
    • The purchase of long-term machinery and equipment

    A 504 loan cannot be used for:

    • Working capital or inventory
    • Consolidating, repaying or refinancing debt
    • Speculation or investment in rental real estate