SBA Loan Comparison
The SBA doesn't lend directly — it guarantees loans made by partner banks, reducing risk so you get better rates and terms. Here's how the programs compare.
SBA 7(a) Loan
General business purposes — working capital, equipment, real estate, refinancing
Terms
Up to 25 years (real estate), 10 years (equipment), 7 years (working capital)
Rates
Variable or fixed. Prime + 2.25% to 4.75% depending on size and term
Down Payment
10-20% typically
SBA Guarantee
SBA guarantees 75-85% of loan to lender
Pros
- + Most flexible use of funds
- + Longest terms available
- + Can refinance existing debt
- + Available through most banks
Cons
- - Requires strong credit (680+)
- - Extensive paperwork
- - Can take 30-90 days to close
- - Collateral often required
SBA 504 Loan
Major fixed assets — buying real estate, large equipment, renovations
Terms
10 or 20 years fixed rate
Rates
Below-market fixed rate (typically 0.5-1% below 7(a) rates)
Down Payment
10% (vs 20-30% for conventional commercial loans)
SBA Guarantee
CDC provides 40%, lender provides 50%, borrower provides 10%
Pros
- + Lowest fixed rates of any SBA program
- + Only 10% down payment
- + Long terms reduce monthly payments
- + Great for real estate
Cons
- - Cannot be used for working capital
- - Must create or retain jobs
- - Owner must occupy 51%+ of building
- - Two closings (bank + CDC)
SBA Microloan
Startups and very small businesses needing smaller amounts
Terms
Up to 6 years
Rates
8-13% (intermediary sets rates)
Down Payment
Varies by intermediary
SBA Guarantee
Loans made through nonprofit intermediary lenders
Pros
- + Easier to qualify than 7(a)
- + Available to startups with limited history
- + Often includes free business mentoring
- + Faster approval process
Cons
- - Maximum $50,000
- - Higher interest rates
- - Shorter repayment terms
- - Cannot buy real estate
SBA Express Loan
Businesses needing fast access to smaller amounts
Terms
Same as 7(a) — up to 25 years
Rates
Prime + up to 4.5% (under $50K) or 6.5% ($50K-$500K)
Down Payment
Varies by lender
SBA Guarantee
SBA guarantees 50% (vs 75-85% for standard 7(a))
Pros
- + 36-hour SBA turnaround on approval
- + Revolving line of credit option
- + Less paperwork than standard 7(a)
- + Good for seasonal businesses
Cons
- - Lower SBA guarantee means stricter lender requirements
- - Higher rates than standard 7(a)
- - Capped at $500K
- - Lender may require more collateral
Important Notes:
- Rates and terms are approximate and change frequently. Verify with SBA.gov and your lender.
- SCORE.org offers free mentoring to help you choose and apply for SBA loans.
- SBA loans require a personal guarantee from owners with 20%+ stake.
- This is not financial advice. Consult an SBA-preferred lender or financial advisor.