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Best SBA Loans To Start A New Business

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  • Low interest rates
  • Longer repayment terms
  • Flexible use of funds
  • Lengthy approval process
  • High credit standards
  • Collateral requirements

Best SBA Loans To Start A New Business

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Best SBA Loans To Start A New Business: How To Get, Requirements & More

Starting a new business can be exciting, but it can also be expensive. One of the new entrepreneurs' biggest challenges is securing the funding to launch their idea and take the first crucial steps toward success. Don't let limited funds hold you back - turn your passion into a thriving business by overcoming any funding hurdles ahead.

In the business world, getting the funding you need can be a make-or-break situation. But fear not because SBA loans are your trusty sidekick, ready to rescue you when you need a financial boost. Whether you're after a big loan to purchase new digs or gear or just need some help with working capital, the SBA has got you covered. However, just like with any superhero, the SBA loans each have unique powers and requirements, so it's essential to research and choose the right one for your needs. 

SBA loans may not be the answer for everyone, mySMBscore can help you find the right business loan or help you understand the steps you need to take to qualify.

Keep reading to learn more about SBA loans for new businesses and SBA loans for startups. 

Lenders for SBA Startup Loans

SBA startup loans offer a wealth of opportunity for small businesses. To obtain an SBA loan, you’ll need to work with an SBA-approved lender to get prequalified. While the SBA sets requirements and partially backs the loan, they do not actually offer the loan. Therefore, there are select lenders that are approved to offer SBA loans. Keep in mind there are several types of SBA loans available so you’ll need to make sure the lender you choose offers the type of loan you are seeking. 

If you are seeking an SBA 7(a) loan, check out Kapitus, an online lender that can provide access. Kapitus is both a direct lender but also partners with an extended network of financial partners to meet the needs of customers. In addition to offering SBA 7(a) loans, Kapitus also offers business loans, lines of credit, equipment financing, and other financial products for small business owners. Repayment options and qualification requirements can vary depending on the type of loan as well as the request. Known for an easy application process and quick funding, the downside of Kapitus is potentially a lack of transparency. With an SBA loan though, there is more structure so lack of transparency should not be as much of a concern. In addition, Kapitus does offer customer support so feel free to contact them with any questions you may have. Before signing the dotted line make sure you understand the agreement, and that goes for any loan you should take. 

Lenders for SBA Startup Loans for Bad Credit 

As an entrepreneur you’ve dedicated much of your time and resources into growing ideas, and we applaud you for that. However, keeping up with life while chasing your dreams can result in financial challenges. If you have bad credit, it can be a roadblock when it comes to startup financing, but don’t lose hope just yet. While it’s advisable to be conscious and work to improve your score, if you need financing now, you may want to consider Kapitus for a SBA startup business loan for bad credit. 

Kapitus (minimum credit score requirement 600)

Kapitus has a low minimum credit score requirement of 600, although this can vary depending on the type of loan. SBA loans are designed to give small business owners or startups an opportunity to grow that they may have had otherwise. With an easy application process and online access, startup business owners can start the process online to see if they qualify for a loan with Kapitus. 

Lenders for fast SBA Startup Loans

While SBA loans are known for taking some time to be approved, you may be in a hurry to receive funds. If you need funds quickly, work with a lender that offers same day approval such as Kapitus. While you may not be able to receive an SBA approval the same day, Kapitus offers a long list of lending products that can be approved the same day.

Can You Get an SBA Loan for a Startup?

The SBA offers a variety of loan programs which will be important to know about, especially as a startup. Startups can qualify for some SBA programs, but they are in high demand. The success of your business is worth fighting for, but be protective and smart with your time. To better understand your financial position through the eyes of a lender, visit mySMBscore to fast track the path to a startup business loan.

Is it hard to get an SBA loan to start a business?

Regardless of the type of loan, startups face a challenge when it comes to getting a business loan. Furthermore, any SBA loan is challenging to qualify for and requires plenty of patience. If you are looking to have funds soon, it may be best to explore other options. 

How do I get a startup SBA Loan?

First, you’ll need to study the requirements for the various loan programs to understand which one you might qualify for. Next, you’ll need to find an SBA-approved lender to apply through. If you’re struggling to choose the right loan program - consider reaching out for advice from the lender first. If you’re not confident that an SBA loan is the answer, visit mySMBscore to explore other options. 

How can an SBA loan help my startup?

If you qualify for an SBA loan, you can receive funds to help grow your business. The federal government backs SBA loans, and interest rates are capped. Since loans are back, the risk for the lender is reduced, and business owners can have a better chance of qualifying. However, because they are backed, the SBA thoroughly screens all applicants. 

What Types of SBA Startup Loans are Available?

4 Most Popular SBA Loans for Small Businesses

The SBA doesn't provide loans directly. Instead, it partners with banks and other lenders to offer various loan programs. Here are four of the most popular SBA loans for startups:

1. SBA 7(a) Loan Program

For small businesses seeking a little financial support, the SBA 7(a) loan program is like a superhero in a business suit! With loans of up to $5 million and repayment terms that bend to your needs, it's the most popular choice among SBA offerings. Remember, while interest rates may be a bit higher than other programs, the SBA's guarantee on a portion of the loan means you'll be in good hands. 


  • Maximum loan amount of $5 million
  • Can be used for various purposes, including starting a new business, purchasing an existing business, or expanding an existing business
  • Repayment terms up to 25 years
  • Interest rates are based on market conditions and may vary
  • Requires collateral, including personal assets such as homes or savings accounts

2. SBA 504 Loan Program

The SBA 504 loan program is the real estate tycoon of the SBA loan world. It's the perfect way for small businesses to level up their property game and realize their dreams of owning a commercial space. With loans up to $5.5 million and flexible repayment terms of up to 20 years, it's the ideal solution for new businesses looking to build their empire. And the best part? The SBA guarantees a slice of the pie, making it easier for startups to secure their American Dream.


  • Maximum loan amount of $5 million (up to $5.5 million for select energy projects)
  • Can be used for the purchase of real estate, equipment, or machinery
  • Repayment terms of up to 20 years
  • Interest rates are fixed
  • Requires collateral, including personal assets or business assets

3. SBA Microloan Program

Small businesses, are you in need of a boost? Look no further than the SBA Microloan program - your compact, quick-fix solution for financing your entrepreneurial dreams. With loans up to $50,000 and terms that extend to six years, you'll get the cash you need without breaking the bank (or your back). The interest rates may be higher than a standard SBA loan, but consider it a small price to pay for convenience and speed.  


  • Maximum loan amount of $50,000
  • Can be used for starting or expanding a business, purchasing inventory or supplies, or hiring employees
  • Repayment terms up to 6 years
  • Interest rates are typically lower than other SBA loan programs
  • Does not require collateral for loans under $35,000

4. SBA Community Advantage Loan Program

Small businesses in underserved communities, your funding solution has arrived! The SBA Community Advantage loan program offers a beacon of hope, providing loans up to $250,000 and repayment terms that stretch as far as 25 years. It is important to note that the interest rates may be higher compared to other SBA loan options, but with this program, you'll have access to funding that may otherwise be unattainable.


  • Maximum loan amount of $350,000
  • Can be used for starting or expanding a business, purchasing inventory and supplies, or hiring employees
  • Repayment terms up to 25 years
  • Interest rates may be higher than other SBA loan programs
  • May require collateral, including personal assets or business assets
  • Program expires: September 30, 2024,

It's important to note that while these are general guidelines, loan requirements, and terms can vary based on the lender and your specific circumstances. It's recommended to consult with an SBA-approved lender or a financial advisor to determine the best loan options for your business.

Who qualifies for a startup SBA loan?

At the minimum, businesses need to be for-profit and operate in the U.S. or U.S. territories. In most cases, borrowers must also demonstrate they have utilized other resources, such as personal assets, to qualify. Businesses must be legitimate and able to provide any documentation requested during the approval process. The qualification guidelines can vary depending on the loan program.

What are the minimum requirements for an SBA loan?

SBA loan requirements can vary depending on the loan program and the industry the business operates within. Startups might consider an SBA microloan, Community Advantage Loan, or even a 7(a) loan. Determine which loan program you want to apply for and explore the specific requirements. 

The following requirements are set forth for an SBA 7(a) loan. Still, they are not limited to

  • Registered as a for-profit business
  • Business owner cannot be on parole
  • Business must have less than 500 employees and less than $7.5 million revenue on average annually (average is calculated based on the last three years)
  • Net income below $5 million 
  • Tangible net worth less than $15 million
  • Prove “invested equity” meaning your own time and money is being invested into the business
  • Prove sound business purpose
  • Prove existing debts to the U.S. government are current
  • Good credit score
  • Healthy credit history (no bankruptcies, foreclosures, or tax liens)
  • Minimum time in business of 2 years
  • Ability to back the loan with collateral over $25,000
  • Ability to put 10% down if funds are intended for commercial real estate, purchase a business, or business-related equipment
  • Sufficient cash flow and working capital 
  • Good business practices and character

What is the easiest SBA loan to get?

The SBA Express loan is known for quick approval times, flexible terms, and less strict down payment requirements. For fast funding, consider this option or explore potentially faster options at mySMBscore.

Do SBA startup loans require collateral? 

SBA loans up to $25,000 may not require collateral. For loans upward of $350,000, lenders will request collateral. 

What businesses are not eligible for SBA loans?

Qualifying for an SBA loan comes with its share of challenges. But, beyond that, some businesses will never be eligible for an SBA loan. Here are some examples of ineligible businesses. 

  • Illegal activity
  • Loan packaging
  • Speculation
  • Multi-sales distribution
  • Gambling
  • Investment or lending 
  • Real estate firms (if a property is held for investment purposes)
  • Pyramids sales plans 

To learn more about ineligible businesses, visit the SBA website. 

What can disqualify you from getting an SBA loan for a startup?

Businesses can be disqualified from getting an SBA loan for several reasons. One is they simply do not qualify. But, beyond that, the SBA wants to help honest business owners with a good track record. They take things like character and morale into account. Businesses that partake in illegal activity will be automatically disqualified. Furthermore, businesses operating in certain industries, such as lending or investments, may not qualify. Consult with an SBA-approved lender to find out if it's worth your time to apply. 

Which SBA loan is right for your new business?

So, which SBA loan is right for your new business? An easy way to check your business’s financial readiness is to utilize a platform like mySMBscore. This can help you determine your eligibility and help you prepare to apply for an SBA loan or any type of business loan.

So, now that you know what types of SBA loans are available, I’m sure you’re wondering, how can I get an SBA loan for my new business now? Here are a few things to consider:

1. Loan Amount

If you want to use an SBA loan to start a business, it’s important to know how much money you need. Starting or growing a business requires some green, and the amount depends on the size of your aspirations. If you're dreaming big, the SBA 7(a) or 504 loan programs are most suitable to help you hit your targets. But, if you're looking for something more conservative, the SBA Microloan or Community Advantage programs help you scale at your own pace. ​​Choose the right program for your needs, and you'll be on your way to making your business dreams a reality.

2. Repayment Terms

When paying back a loan, timing is everything. If you're looking for a more relaxed repayment schedule, the SBA 7(a) or 504 loan programs might be your tea. But, if you prefer a quicker payback, the SBA Microloan or Community Advantage programs provide a more compact repayment term. Just remember, timely payments and maintaining good financials are key to successfully repaying the loan and keeping your business thriving. You must weigh your options and choose the loan program that best aligns with your business strategy. ​​So, take your time, weigh your options, and choose the loan program that best fits your business goals.

3. Use of Funds

When deciding on the right loan for your business, it's important to consider what you will be using the funds for. The versatile SBA 7(a) loan can assist with working capital, equipment purchases, or real estate ventures. The SBA 504 loan is specifically built for asset purchases, providing a solid foundation for your business. The compact SBA Microloan is ideal for smaller purchases such as supplies, inventory, or equipment. For businesses in underserved communities, the SBA Community Advantage loan offers support for working capital, inventory, and equipment purchases, serving as a beacon of hope. So, it's time to find the right fit for your business needs and get the funding you need to grow and succeed!

4. Collateral Requirements

Your assets can be crucial in securing the funding you need. If you're ready to put up collateral, the SBA 7(a) and 504 loans are like the VIP section of lending, requiring collateral as the price of admission. However, if you're not quite ready to commit, the SBA Microloan and Community Advantage programs may be more accommodating. However, just like at any establishment, it's best to check with the lender to see their specific requirements.

5. Eligibility

You may be thinking, can I get an SBA loan for my new business now?.To be eligible, your business must:

  • Be a for-profit enterprise
  • Meet the SBA's size criteria
  • Be a U.S. Citizen
  • Be operating within the confines of the law and unable to secure credit from alternative sources. 

But just like every club has its own dress code, each SBA loan program has its own specific eligibility standards. So, don't get caught off guard at the door; check the requirements before you make your move.

​​So there you have it, the ins and outs of finding funding for your small business. It can seem overwhelming at first, but with the help of platforms like mySMBscore, it doesn't have to be. By better understanding your financial health, you can make informed decisions about what funding options will work best for you and your business. 

Whether you're looking for a big loan or just some extra working capital, the right funding can make all the difference. Don't be afraid to explore your options. So go forth, young entrepreneur, and let the SBA help take your business to new heights. 

Best of luck on your small business journey!

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