Small business loans: types, rates, and how to qualify
A small business loan keeps your ownership intact and trades equity for fixed payments. The right product depends on what the money is for and how quickly the business can service it.
- SBA 7(a) for working capital, acquisition, or expansion
- SBA 504 for real estate and heavy equipment
- Lines of credit for cash-flow timing, not for growth
- Seller financing to bridge an acquisition gap
The main loan types
SBA 7(a) is the workhorse: up to $5 million, ten-year terms for working capital and up to 25 years with real estate, and a partial government guarantee that makes banks more willing to lend.
SBA 504 funds owner-occupied real estate and major equipment at long, fixed terms. Lines of credit cover seasonal or receivable gaps. Equipment finance is secured by the asset itself, so approval is faster.
What lenders check
Personal credit score, typically 680 or higher for SBA. Two or more years of tax returns, debt service coverage of roughly 1.25x, available collateral, and industry experience.
Almost all SBA loans require a personal guarantee. Understand what you are pledging before you sign.
When a partner beats a loan
Debt is cheaper than equity when the business already produces predictable cash flow. When it does not, fixed payments turn a slow month into a crisis.
If you need capital plus operating expertise, an equity partner is usually the better trade. Venturα matches owners with investors who bring both.
Find your partner or investor on Venturα
Create a profile, set your city, industry, and check size, and match with business owners, investors, and operating partners. Messaging opens only when both sides connect.
Frequently asked questions
What credit score do I need for a small business loan?
Most SBA lenders look for 680 or higher, plus two years of operating history and debt service coverage around 1.25x.
How long does an SBA loan take?
Typically 30 to 90 days from complete application to funding. Preparing tax returns, financials, and a business plan in advance is the biggest time saver.
Can I get a loan for a startup?
It is harder without operating history. Startups usually rely on savings, a home equity line, an SBA microloan, or an equity partner.