What is an SBA Loan?
SBA-guaranteed loans are made by private lenders for small business and are guaranteed up to 80 percent by the SBA. This helps reduce the lender’s risk and helps them provide financing that’s otherwise unavailable at reasonable terms. SBA loans are typically more difficult to qualify for but offer low rates, favorable terms, and other benefits. From 7(a) loans and microloans to disaster loans and debt consolidation, SBA loan programs come in many different forms. Credibly can help you gain access to the best federally-backed funding option you qualify for.
What Can an SBA 7(a) Loan Do For My Business?
The SBA has a variety of different loans available to small business owners and Credibly is able to provide access to loans for working capital, debt refinancing, and equipment purchases. With low interest rates and favorable terms, Small Business Administration loans offer numerous benefits for nearly any use.
SBA Working Capital loans are a great option for entrepreneurs who need funds for business operating expenses. These loans fall under the category of SBA 7(a) loans and offer advantages specifically for small business owners seeking less than $150,000.
With rates between 5-8% and terms between 5-25 years (depending on program and loan uses) refinancing debt through SBA loans offers affordable lending solutions for small and growing firms.
SBA 7(a) Loans can be a great solution for financing long-term equipment. SBA International Trade loans can be used for fixed assets for construction, building, and real estate equipment for export transactions.
Commercial Real Estate
SBA 504 loans offer commercial real estate financing for owner-occupied properties. These loans require only a 10 percent down payment by the small business owner and funding amounts range from $125,000 to $20 million
SBA Loan Requirements
As a federally-backed financing option, SBA requirements are stricter than other lending programs. The application process requires you to provide more information than other financing solutions and has more strict minimum qualifying criteria such as not having any felonies on the business owner’s record.
Minimum Qualifying Criteria
- 620+ personal credit score
- 2+ years in business
- The business owner must be a U.S. citizen or legal permanent resident
- Must not have outstanding tax liens
- No bankruptcies or foreclosures in the last 3 years
- Signed business loan agreement
- Business mortgage statement if you own; business lease agreement if you rent
- Unexpired government-issued picture ID of all owners
- Bank statements from business banking account—most recent 3 months*
- For loans over $100,000 we require your most recent business tax return
Interest Rates and Fees
- Fixed interest rates starting as low as 6.99%
- Repayment terms from 2 – 5 years
How to Apply for an SBA Loan
SBA Loan: Advantages and Disadvantages
SBA Loans Advantages
- SBA loans are federally-backed and offer lower APRs and longer repayment periods
- SBA loan programs offer both small and large funding amounts for optimal coverage
- Businesses typically not approved for traditional bank loans could qualify
- With large loan amounts and low SBA loan rates, these small business loans can be ideal for growth initiatives.
SBA Loans Disadvantages
- SBA loan applications are more strict and time-consuming than applications for other term loans or working capital products.
- The borrower may be required to make a down payment
- Collateral may be required and low-credit applicants may not be approved.
- Time to receive funds is slower which means that SBA financing may not be a good fit for certain business needs.
FAQs About SBA Loans
Who qualifies for an SBA loan?
In general, SBA loans require a minimum of two years in business, $100,000 in annual revenue, and a credit score of 620 or higher. However, different SBA lenders may require elevated criteria.
How long does it take for an SBA loan to be approved?
The exact time it takes to be approved for an SBA loan depends on your application and your lender. SBA 7(a) loans typically take two to three months to be approved but if you are working with an SBA Preferred Lender, your application may be approved much faster, relatively speaking.
What credit score is needed for an SBA loan?
Generally speaking, SBA loan credit score minimums typically range from 620-640+. That said, the credit score needed for an SBA loan depends on the specific lender you work with and which SBA program is applying for.
Other Financing Options
Working Capital Loan
Fast, flexible financing to cover operating expenses and stabilize cash flows.
Get access to the equipment you need now, while paying for the asset over its lifetime.
Merchant Cash Advance
Flexible financing and repayment based on what you can afford
See All Financing Options
Still looking for the right fit? Check out all of Credibly’s business financing options.
Simple Ways to Get Started with SBA loans
When you’re running low on cash and need to support your operations, access to fast, flexible business financing is crucial. To get started, fill out our online prequalification form or call our Customer Success Team at (888) 991-3954.
*Bank statements must be from the business banking account for the business receiving funds.