Pick Your SBA Loan Path

Start here: Do you own real estate or buying equipment? Go to the 504 guide. Starting out or borrowing under $50,000? Jump to microloans. Funding operations, inventory, or working capital? The 7(a) guide is your match. Each link below takes you to the full comparison—rates, fees, qualification hurdles, and application steps for that product.

Key differences: SBA 7(a), 504, and Microloans

All three are SBA-backed products, but they serve different borrowing situations. Understanding which fits yours before you apply saves time and improves your odds.

SBA 7(a) Loans are the workhorse of small business lending. They're general-purpose: use the money for working capital, equipment, inventory, debt refinancing, or expansion. Rates float with prime, starting around 5.5–7.5% APR in 2026, and you can borrow up to $5 million. The catch is variable rate exposure—if prime rises, so does your payment. Most common size is $300,000; approval takes 30–45 days.

SBA 504 Loans fix your rate and lock your payment. They're designed for real estate (land, buildings, tenant improvements) or major equipment purchases. Rates start 1–2 points lower than 7(a) because they're fixed, but you pay more in fees, involve two lenders, and have strict collateral rules. Processing is slower: 60–90 days. Maximum loan is $5.5 million, but most borrowers use them for $100,000–$2 million purchases. Not flexible for working capital—use case must match collateral.

SBA Microloans max out at $50,000 and are built for startups and very small businesses. Rates run 6–8% and approval is fastest—7–14 days. The tradeoff: smaller ceiling, shorter terms (typically 6 years), and less flexibility on use. But credit requirements are easier and processing feels human—microloans come through nonprofit Community Development Financial Institutions (CDFIs), not just banks.

Credit and income rules differ too. Traditional banks offering 7(a) and 504 want 680+ credit and 24 months in business. If you're under 24 months or your credit is 620–650, microloans are easier to access. But even if you qualify for all three, your situation determines which makes financial sense. Run the numbers using an affordability calculator before picking—monthly payment impact is real.

Fees and total cost matter more than headline rate. SBA 7(a) loans include a guarantee fee (1–3% of loan amount) and lender origination fee (0.5–2%). SBA 504 loans add a CDC fee and have a second lien, which costs more upfront but locks in safety. Microloans are simpler: fewer fees, but higher rates offset the savings. Over five years, a 6.5% fixed 504 often beats a 7.0% variable 7(a) even with higher fees—it depends on whether rates rise.

One more reality: SBA loan denial studies show that cash flow and collateral are the biggest rejection drivers, not credit score alone. Even with good credit, lenders want to see 18+ months of clean financials and assets to pledge. If you're thin on collateral, microloans or a 7(a) with an SBA guarantee (which covers the bank's loss) become more attractive than 504s, which demand stronger equity.

Use the guides below to dig into your product, then move to an application. Each one walks you through qualification thresholds, fee breakdowns, and lender selection.