Small Business Administration: programs owners actually use
The Small Business Administration (SBA) is the federal agency that supports small businesses. It does not usually lend directly — it guarantees a portion of loans made by banks, which is why SBA-backed terms are longer and down payments smaller.
- 7(a): working capital, acquisition, and expansion up to $5M
- 504: owner-occupied real estate and major equipment
- Microloans: up to $50,000 via nonprofit intermediaries
- Free mentoring through SCORE and Small Business Development Centers
The lending programs
7(a) is the flagship: up to $5 million for working capital, business acquisition, refinancing, or expansion, with terms up to 10 years and 25 years when real estate is included.
504 pairs a bank loan with a Certified Development Company debenture for long-term fixed-rate real estate and equipment financing. Microloans go up to $50,000 through nonprofit lenders and are more accessible to newer businesses.
Size standards and certifications
The SBA sets size standards by industry, based on employee count or average annual receipts. Meeting them is what qualifies a business for SBA programs and set-aside contracts.
Certifications — 8(a), HUBZone, Woman-Owned, and Service-Disabled Veteran-Owned — open access to federal contracts reserved for those categories.
Support beyond money
SCORE mentoring, Small Business Development Centers, and Women's Business Centers offer free or low-cost counselling, financial modeling help, and loan application review.
Use them before applying. A cleanly prepared package is the single biggest factor in approval speed.
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Frequently asked questions
Does the SBA lend money directly?
Rarely. It guarantees loans made by participating banks and lenders, which lowers their risk and improves your terms. Disaster loans are the main direct exception.
What is an SBA 7(a) loan used for?
Working capital, equipment, business acquisition, partner buyouts, refinancing, and expansion — up to $5 million.
Who qualifies as a small business?
It depends on industry size standards set by the SBA, based on employee count or average annual receipts. Most have fewer than 500 employees.