SBA Business Loans

Expand and elevate your business with these low-interest, long-term loans.

Introduction to SBA Loans

SBA Loans are highly coveted in the realm of business financing due to their unparalleled interest rates, terms, and borrowing limits, distinguishing them from other loan options. However, these advantages are coupled with rigorous qualification criteria that often catch business owners off guard. The complex application process and prevalent misconceptions further add to the challenge of securing approval for SBA Loans.

In this comprehensive guide, we will address the following questions and more:

What Is An SBA (Small Business Administration) Loan?

SBA stands for “Small Business Administration,” a government agency pivotal in assisting small businesses by facilitating financial assistance through SBA Loans. Unlike traditional loans, where you apply directly to the lender, SBA Loans require applying through commercial banks, credit unions, or alternative business financing facilitators like 60Day Capital.

What distinguishes SBA Loans are their unique guarantees. The SBA guarantees up to 85% of loans up to $150,000 and up to 75% of loans exceeding that amount up to $500,000. This assurance allows lenders to recover a significant portion of the loan amount in case of borrower default.

It’s crucial to note that the SBA itself does not approve or reject loan applications. Instead, this responsibility rests with the participating SBA lender, each applying its specific approval criteria. Once a lender approves an application, it then seeks the SBA’s guarantee for the loan.


$50K – $5.5M


Starting at Prime + 2.75%


10-25 years


8-12 weeks

How Do SBA Loans Work?

The 7(a) Loan

This is the most popular type of SBA Loan, versatile for a range of purposes including hiring more employees, acquiring new equipment, refinancing debt, purchasing commercial real estate, stocking up on inventory, and more. The maximum loan amount is $5 million, with repayment terms extending up to 25 years depending on the use of funds. Interest rates typically range from 5% to 10%.

For loans up to $150,000, there’s a fee of 1.7%, and for loans over that amount, the fee increases to 2.25%. These fees may be rolled into the total loan amount. Additionally, borrowers may encounter origination or loan packaging fees.

However, 7(a) Loans have specific limitations. They cannot be used to purchase real estate for leasing purposes to other businesses, reimburse business owners for previous investments in the business, or settle debts owed to the U.S. government.

The CDC 504 Loan

SBA 504 loans are specifically designed for acquiring major assets like heavy-duty machinery and commercial real estate, with these assets typically serving as collateral for the loan.

Borrowers can access up to $5.5 million, with repayment terms extending up to 20 years. Interest rates typically range from 5% to 6%, and total fees generally amount to approximately 3% of the loan amount. A down payment of about 10% is also required.

One unique aspect of this loan is the requirement to specify the use of funds, which affects both the borrowing limit and approval likelihood.

For instance, if the loan aims to create jobs, borrowers must generate one job for every $65,000 borrowed. For manufacturing businesses, this requirement increases to one job for every $100,000 borrowed, with a borrowing limit of $5 million.

When the loan is intended for public policy-related purposes—such as business district revitalization, minority business development, or expanding women-owned businesses—the borrowing limit rises to $5.5 million.

For small manufacturing businesses, the requirement includes creating or retaining at least one job per $100,000 guaranteed by the SBA, with the loan used for public policy-related purposes. Meeting these criteria sets the borrowing limit at $4 million.

The SBA Microloan

The SBA Microloan program derives its name from the modest loan amounts available. Borrowers can access up to $50,000, with repayment terms extending up to 6 years. Interest rates for these loans typically range from 8% to 13%, and there are no associated fees.

Economic Injury And Disaster Loans (EIDL)

This product is tailored for businesses that have suffered physical damage from natural disasters such as floods or tornadoes.

You can borrow up to $2 million at a fixed interest rate of 3.75%, with a maximum repayment term of 30 years. The first monthly payment is deferred for one year from the promissory note date. There are no fees, including prepayment penalties, and no collateral is required.

Unlike most other SBA Loans, Economic Injury Disaster Loans (EIDLs) are not obtained through banks or third-party lenders. Instead, you must apply directly through the SBA’s website.

Previously, eligible businesses needed to demonstrate their inability to secure loans or credit from other sources and lacked sufficient cash or credit to cover operational expenses. This requirement has been waived under the CARES Act, allowing businesses with existing credit lines to still qualify for an EIDL.

EIDLs, traditionally available only to registered entities (LLCs, corporations), can now be accessed by sole proprietors, tribal businesses, cooperatives, and independent contractors. However, they are still restricted to companies with up to 500 employees.

For EIDLs under $200,000, approval can be granted without a personal guarantee.

SBA Loans – Research, Facts & Reports
  1. In 2023, the Small Business Administration (SBA) approved over 73,900 loans, totaling more than $121 billion.

  2. More than 50% of Americans either own or work for a small business, which contributes to approximately 66% of new jobs in the U.S. annually.

  3. Studies indicate that 70% of small businesses seek loans amounting to less than $250,000.

  4. Regarding financing, credit demand remained stable in 2018, with 43% of firms seeking external funds for their operations.

  5. For the fiscal year 2019, the Congressional Research Service reported that the average SBA loan amount was $446,487.

What Are The Advantages of SBA Loans?

The SBA loan program is widely regarded as the top choice for business financing, primarily due to its exceptionally low interest rates. For many borrowers, interest rates are a crucial factor in selecting a business loan. While traditional business term loans from banks may offer competitive rates, they often cannot match the SBA’s rates, which can be as low as 5%. In contrast, short-term financing products may carry APRs as high as 99%.

In addition to favorable interest rates, SBA Loans also feature high borrowing limits and extended repayment terms. When utilized strategically, these loans can be transformative for businesses. They are particularly suitable for significant investments, providing essential capital without severely impacting cash flow. Unlike more expensive loan options that could necessitate cutting expenses or delaying plans to meet monthly payments, SBA Loans allow businesses to manage operational costs comfortably. This makes SBA Loans the preferred choice for businesses looking to optimize their return on investment (ROI).

What Are The Disadvantages of SBA Loans?

Anyone exploring business loans understands that convenience often comes with a price. While SBA Loans offer unmatched benefits and convenience, they also come with the most stringent requirements.

Prospective borrowers might assume that because the SBA guarantees a large portion of the loan, these loans should be easier to obtain compared to traditional Business Term Loans. However, with the SBA guaranteeing up to 85% of the loan, financial institutions still face the risk of losing money in case of default. As a result, they are only marginally more flexible with SBA Loan applications. If you have concerns about qualifying for a traditional Business Term Loan, your chances of securing an SBA Loan may be limited.

One significant drawback of SBA Loans is the lack of standardized, concrete requirements. Each participating financial institution sets its own criteria for approval, with some potentially favoring specific industries or business types. For instance, banks often prefer well-established companies with substantial bank balances.

Prospective borrowers should anticipate a lengthy and intricate application process. Extensive documentation is required, and it may take at least three months to receive an approval decision. Applicants may need to approach multiple institutions before securing approval and might even be advised to reapply after improving their financial situation. Unlike simpler loan products, SBA Loans typically demand patience and persistence, diverging from straightforward, single-application, quick-approval processes.


SBA Business Loans Compared To Other Products


Who Qualifies For SBA Business Loans?

Approved businesses generally met the following criteria:






2 years+

How To Apply For SBA Loans:

60Day Capital has forged strategic alliances with preferred SBA lenders, allowing us to expedite loan approvals and fund disbursements in as little as three weeks. Here’s how you can get started:

Step 1: Ensure You Meet Qualifications

For those aiming to secure extended terms and the lowest interest rates, meeting stringent criteria is essential. It’s advisable to maintain a credit score comfortably above 650-700 and ensure consistent month-to-month cash flow. Since SBA Loans are designed for significant investments, substantiating your investment plans with solid data is crucial, regardless of the lender you approach.

Step 2: Gather Required Documents

Prepare the following documents and information for your SBA Loan application:

Step 3: Complete the Application

To begin the application process, you can get started by reaching out to us directly or by completing our simple online form. Please include all required details, including the funding amount you are seeking, as discussed earlier.

Step 4: Consult with a Representative

After submitting your application, one of our representatives will contact you to discuss the repayment terms, interest rates, and the various options available to you. This ensures transparency throughout the process and helps prevent any unexpected fees or terms during the repayment period.

Step 5: Approval and Disbursement

Usually, SBA Loans processed through our network take between 3 to 5 weeks. Once your application is approved and finalized, funds are typically deposited into your bank account within a few business days.

Your SBA Loan Setup – What’s Next?

Your business loan serves not only as a financial resource but also as a chance to enhance your credit profile. It’s crucial to make all required payments promptly and in full. If you’re utilizing a business credit line or another form of revolving credit, ensure your balance remains below the credit limit.

Consistently meeting your business financing obligations improves your creditworthiness, paving the way for more favorable rates and terms for future financial needs.

What If I’m Declined For An SBA Loan?

Given the rigorous approval requirements for SBA Loans, applications can often face rejection due to overlooked or misunderstood criteria. It’s essential to apply only when you thoroughly understand and meet all specific requirements of the institution, which may require direct communication with them for clarification.

However, a rejection for an SBA Loan doesn’t mean you’re ineligible for other beneficial financing options. While these alternatives may not offer the lowest interest rates or highest borrowing amounts, they can still effectively support business growth over time. Starting with a standard Business Term Loan or Business Line of Credit allows you to build a track record of timely payments, enhancing your credit score and demonstrating responsible cash flow management.

If traditional options remain challenging to qualify for, consider alternative business financing tools such as business credit cards or personal loans, which are generally more accessible than business loans and can be facilitated through 60Day Capital. Often, challenges in securing financing stem from poor credit. In such cases, exploring credit repair services could help improve your creditworthiness by addressing underlying issues.

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175 Great Neck Rd # 206, Great Neck, NY 11021, United States