Government-backed lending
SBA Loans for Established, Growing Businesses
SBA loans are made by participating lenders and partially guaranteed by the U.S. Small Business Administration. The guarantee supports longer terms and capped rates for working capital, equipment, real estate and business acquisitions, in exchange for a more thorough application.
Start with a short application. An advisor explains which SBA programs may fit and what lenders will ask for before you begin the full process.
- 7(a) maximum
- $5 million
- SBA Express maximum
- $500,000
- Longest terms
- Generally up to 10 years, or up to 25 years for real estate and long-life equipment
- Who makes the loan
- A participating lender, with a partial SBA guarantee
Program limits are set by the SBA and can change. Lenders set their own requirements within SBA rules, and approval is the lender’s decision. Correia Financial is not affiliated with the SBA.
A lender makes the loan, and the SBA guarantees part of it
In the 7(a) and 504 programs, a bank, credit union or other approved lender makes the loan, and the SBA guarantees a portion of it. The guarantee reduces the lender’s risk, which supports longer repayment terms and rate limits set by SBA rules.
7(a) loans are the most flexible, covering working capital, equipment, real estate, refinancing and business acquisitions. SBA Express is a 7(a) option with a smaller maximum and a streamlined process. 504 loans finance major fixed assets such as real estate and long-life equipment by combining a lender loan, a loan from a Certified Development Company (CDC) and a contribution from the business.
The tradeoff is time and paperwork. SBA lenders review the business and its owners in detail, and program rules govern eligibility, use of funds, collateral and guarantees.
Prepare
Gather financial statements, tax returns and a clear plan for the funds.
Lender review
The lender underwrites the business and its owners and confirms SBA eligibility.
SBA guarantee
The lender obtains the SBA guarantee, either under its delegated authority or by submitting to SBA.
Close and fund
After approval, the lender prepares the loan documents, closes and disburses funds.
7(a) or 504? Start with what you are financing
Choose what you want to finance to see which SBA program commonly fits and how it is structured.
What are you financing?
Program rules change. Your lender confirms eligibility and structure under the SBA rules in effect when you apply.
Working capital fits the 7(a) program
Program that commonly fits
SBA 7(a), including SBA Express for amounts up to $500,000. 504 loans cannot be used for working capital or inventory.
Structure
A term loan or, under some 7(a) options such as SBA Express, a revolving line of credit. Working capital terms are generally up to 10 years.
Considerations
Lenders look for repayment ability from cash flow and take available collateral under SBA rules.
Both programs can finance equipment
Program that commonly fits
7(a) for equipment alongside other needs. 504 for machinery with a remaining useful life of at least 10 years, often as part of a larger fixed asset project.
Structure
7(a): a single lender loan. 504: a lender loan, a CDC loan and a contribution from the business.
Considerations
504 projects must meet job creation or public policy goals. Terms over 10 years require equipment with a useful life to match.
Buying or building the property you operate from
Program that commonly fits
504 is built for owner-occupied commercial real estate. 7(a) can also finance real estate, with terms up to 25 years.
Structure
504: at least 50 percent from a lender, up to 40 percent from a CDC and at least 10 percent from the business. The business share rises to 15 percent for businesses operating two years or less or for special-purpose buildings, and to 20 percent when both apply.
Considerations
The business generally must occupy most of the property. Investment properties held for rental income are not eligible.
Acquiring an existing business or a partner’s share
Program that commonly fits
SBA 7(a) is commonly used for business acquisitions and changes of ownership.
Structure
A term loan, with the buyer contributing equity. SBA rules generally require at least 10 percent equity for a change of ownership, with limits on how much seller financing can count toward it.
Considerations
Expect a detailed review of the target business’s financials and cash flow, a business valuation and personal guarantees. Acquisition rules were updated on October 1, 2026, so confirm current requirements with the lender.
Replacing qualifying business debt
Program that commonly fits
7(a) can refinance eligible business debt. 504 can refinance certain fixed asset debt.
Structure
Depends on the debt being refinanced and SBA refinancing rules.
Considerations
The refinance generally must benefit the business, for example through a lower payment. The lender confirms eligibility.
When an SBA loan may make sense
It may fit when
- Your business operates for profit in the United States and meets SBA size standards.
- You want a longer term and are prepared for a detailed application.
- You are financing real estate, major equipment, an acquisition or long-term working capital.
- Owners are prepared to share personal financial information and provide guarantees.
Another option may fit better when
- You need funds for a short-term operating need and timing is tight. Explore working capital
- Your business is very new or still building its financial records. Read the guide
- You want ongoing access to funds rather than a lump sum. Explore lines of credit
- You are financing a single piece of equipment. Explore equipment financing
What SBA loans commonly finance
Owner-occupied real estate
Buy, build or improve the property your business operates from.
Equipment and machinery
Finance long-life equipment for production or service.
Working capital
Support operations, inventory and growth over a longer term.
Business acquisition
Buy an existing business or a partner’s ownership share.
Refinancing eligible debt
Replace qualifying business debt with a longer-term structure.
Expansion projects
Add a location, renovate or expand capacity.
What SBA lenders review
SBA sets program eligibility rules, and each lender adds its own credit standards. These are the main areas reviewed.
- Basic eligibility
- An operating, for-profit business located in the United States that meets SBA size standards and is not in an ineligible line of business.
- Ownership and citizenship
- SBA updated its ownership and citizenship requirements in 2025 and again in 2026. Your lender confirms whether every owner meets the rules in effect when you apply.
- Credit elsewhere
- The business generally must show it cannot get the same credit on reasonable terms from non-government sources without the SBA guarantee.
- Repayment ability
- Lenders look for cash flow that supports the payment, usually from tax returns and financial statements.
- Owners and guarantees
- Owners of 20 percent or more generally must personally guarantee the loan, and owners’ credit and history are reviewed.
- Equity injection
- Start-ups and changes of ownership generally require the borrower to contribute at least 10 percent equity.
- Collateral
- Lenders take available collateral under SBA rules, but limited collateral alone is generally not a reason to decline an otherwise qualified request.
Find out whether an SBA loan fits your plans.
Share your business details and what you want to finance. An advisor will help you understand which SBA programs may fit, what lenders will need and how the process works.
SBA rates, fees and what to expect
SBA loans often carry lower rates and longer terms than many alternatives, but they include program fees and a more involved process.
Terms to know
Maximum interest rates
SBA caps 7(a) rates as a spread over a base rate, with higher caps for smaller loans. For example, a variable rate loan above $350,000 can carry at most the base rate plus 3 percentage points. Rates can be fixed or variable.
Guarantee fee
SBA charges an upfront guarantee fee on the guaranteed portion of most 7(a) loans, set each fiscal year by loan size, and has reduced or waived it for some loans. Lenders commonly pass it to the borrower.
504 fees
504 loans include CDC and SBA fees that are typically built into the CDC loan. The CDC portion carries a rate tied to 10 year U.S. Treasury rates.
Collateral
Lenders take available business collateral and, in some cases, personal real estate, under SBA rules.
Personal guarantees
Owners of 20 percent or more are generally required to guarantee the loan.
Prepayment
7(a) loans with terms of 15 years or more carry a prepayment fee if more than 25 percent is paid early in any of the first three years: 5 percent, 3 percent and then 1 percent of the amount prepaid. 504 loans have their own prepayment terms.
Tradeoffs to weigh
- Expect more documentation and a longer process than many alternative lenders.
- Personal guarantees and personal financial disclosures are generally required.
- Use of funds and eligibility follow SBA rules that can change.
- A 504 project involves both a lender and a CDC, which adds coordination.
Hypothetical example
How a 504 project is commonly structured
A business buys a $2,000,000 building it will occupy, using a common 504 structure.
- First loan from a lender (50%)
- $1,000,000
- Second loan from a CDC (40%)
- $800,000
- Contribution from the business (10%)
- $200,000
- Total project
- $2,000,000
Hypothetical illustration. Start-ups and special-purpose properties may require a larger contribution, and fees are not shown. Not an offer.
What happens after you apply
Unsure whether you are SBA ready? Start the application and an advisor will review it with you, or call to talk it through first.
Questions first? Call 619-387-5891Complete the application
Share details about your business, what you want to finance and the amount you need.
Initial review
Provide your last four business bank statements. An advisor reviews your profile and explains which SBA programs may fit.
Prepare the lender package
Gather tax returns, financial statements, SBA forms and documents for the use of funds.
Lender underwriting and SBA guarantee
The lender underwrites the loan and obtains the SBA guarantee. Approval is the lender’s decision.
Close and fund
If approved and you accept, the lender closes the loan and disburses the funds.
SBA 7(a), SBA Express and 504 side by side
| Feature | SBA 7(a) | SBA Express | SBA 504 |
|---|---|---|---|
| Maximum amount | $5 million | $500,000 | CDC portion generally up to $5 million, or $5.5 million for small manufacturers and certain energy projects |
| Common uses | Working capital, equipment, real estate, acquisitions, refinancing | Working capital, equipment and revolving lines of credit | Owner-occupied real estate and machinery with a useful life of at least 10 years |
| Maximum term | Generally 10 years, or 25 years for real estate and long-life equipment | Follows 7(a) limits; revolving lines up to 10 years | 10, 20 or 25 years |
| SBA guarantee to the lender | 85% up to $150,000, 75% above | 50% | SBA backs the CDC portion |
| Who decides | The lender underwrites; SBA reviews loans not made under delegated authority | The lender, under delegated authority | The lender and the CDC, with SBA approval of the CDC loan |
From SBA program pages and regulations as of the review date. Program limits and rules can change, and lenders may set stricter requirements.
SBA loan questions
Related financing
Related reading
Does the SBA lend money directly?
Not in the 7(a) and 504 programs. Participating lenders and Certified Development Companies make those loans, and the SBA guarantees a portion. Correia Financial is a brokerage and is not affiliated with the SBA.
How long does an SBA loan take?
It varies by lender, loan type and how complete your application is. For standard 7(a) loans submitted to the SBA, the SBA lists its own processing time as 5 to 10 business days, but that is only the SBA’s review of the lender’s request. The lender’s underwriting, closing and funding take additional time.
What credit score do I need?
SBA does not publish a single minimum score for every loan. Lenders set their own credit standards within SBA rules, and SBA uses a business credit scoring model for some smaller 7(a) loans.
Do I need collateral for an SBA loan?
Lenders take available collateral under SBA rules, which can include business assets and sometimes personal real estate. Limited collateral alone is generally not a reason to decline an otherwise qualified request.
What is the difference between 7(a) and 504?
7(a) loans cover a wide range of uses, including working capital and acquisitions. 504 loans finance major fixed assets, such as owner-occupied real estate and long-life machinery, by combining a lender loan, a CDC loan and a contribution from the business.
Can a startup get an SBA loan?
It is possible, but start-ups face extra requirements, such as an equity contribution of generally at least 10 percent, projections and relevant owner experience, and many lenders prefer an operating history.
What does the SBA guarantee mean for me?
The guarantee protects the lender, not the borrower. Your business remains responsible for repaying the full loan, and owners who sign personal guarantees are personally responsible as well.
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Make Room for Your Next Big Investment.
Whether you’re buying a building, acquiring a business or financing a major expansion, start by exploring whether an SBA loan may fit. Share your business details so Correia Financial can review potentially available options, explain what SBA lenders will need and help you understand the terms.
Complete the application and provide your last four business bank statements for an initial review. SBA lenders will also require tax returns, financial statements and SBA forms.
Correia Solutions LLC dba Correia Financial is a business financing brokerage, not a lender. Availability and terms depend on each provider's requirements and underwriting. Applying does not guarantee approval or funding.