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By Numbers Blog

SBA Loans and How You Can Use Them

The economic consequences of the COVID-19 pandemic still shake the lives and financial security of millions of people. Many citizens have lost their jobs or shut down their businesses, with nowhere to go to keep earning.

Keeping in mind your lack of financial security, many might want to invest in their own startups, which is where the SBA loans come in.

SBA loans are a series of loan programs provided by lenders of the Small Business Administration of the US. These are provided through indirect means, such as micro-lending institutions and community development organizations. The types of SBA loans include:

  • Standard 7(a) SBA loans504 loans
  • Microloans
  • 7(a) small loans
  • SBA Express
  • Export business loans
  • Economic Injury Disaster Loan
  • Paycheck Protection Program

The SBA works in the light of a strict set of guidelines to make sure that lenders feel safe while lending money to small businesses.

SBA Loans

Each set of SBA loans that you can take advantage of have some unique eligibilities and usage requirements. Let's have a look at what each loan is for:

Standard SBA 7(a) Loans

These are a type of SBA loans that you can borrow for regular business support. A standard SBA 7(a) loan has a limit of $5 million and can be spread over a term of 5 - 25 years. The percent of guarantee for a loan up to $150k is 85%, while any amount above this has a guarantee of 75%.


  • Starting or expanding a small business
  • Standard upgrades in the system, including furniture, fixture, machinery, equipment, and supplies
  • Revolving funds based on the value of existing inventory and receivables
  • Short-term working capital
  • Real estate purchase, expansion, and renovation
  • Conditional debt management

504 Loans

Also known as CDC loans, SBA's 504 loans are available via Certified Development Companies (CDCs). These are SBA's community-based partners for nonprofit regulation and the development of economic communities. These loans are available at a maximum amount of $5 million with long-term, fixed-rate financing. These loans are specifically for US-located for-profit companies having a net worth of less than $15 million.


  • Business community growth
  • Job creation and enhancements
  • Purchasing land, buildings, facilities, long-term machinery, or equipment
  • Improvement of existing equipment, machinery, or property


Microloans are issued by SBA-funding intermediaries. These are basically small-scale, nonprofit intermediary community organizations. They provide bookkeeping, accounting, financial, and technical assistance to businesses and nonprofit childcare centers. They are specially designated as lenders by the SBA.

A microloan by the SBA can be worth $50,000 at most, while the average figure with most lenders’ teeters at $13,000. However, this type of loan cannot be used for property purchases.


  • Short-term working capital
  • Expand, enhance, or renovate an existing property, equipment, machinery, fixtures, furniture, and supply
  • Improve business goals
  • Inventory investments

Small Loans

7(a) small loans are similar to the standard SBA 7(a) loan program. Despite having a repayment duration of 5-25 years, these loans have a decreased maximum limit of $350,000. 7(a) small loan is perfect for a small business that urgently requires financial support.

An applicant of the 7(a) small loan may be prescreened and fast-tracked if their business FICO credit score is greater than 640. If it isn't, their applications will go in through the regular 7(a) loan procedure.


  • Short-term working capital
  • Real estate repairs or purchases
  • Urgent payment for supplies, equipment, machinery, etc.

SBA Express

SBA express is a small business loan program that provides immediate financial funds to businesses in need, hence the word ‘Express.’ SBA express applications have an expedited process time — the SBA states that it can approve loans in as little as 36 hours after the filing of the application.

SBA Express loans have a maximum limit of $350,000 and operate under guidelines similar to standard SBA 7(a) loans.


  • Immediate capital checkouts for emergency use
  • Urgent repairs or renovation at facilities
  • Meeting sudden requirements for machinery, fixtures, supplies, etc.
  • Real estate investment funds

Export Business Loans

Export business loans for small businesses are specifically for exporters. These are short-term loans, typically 1-3 years in duration, and have a cap of $5 million. To extract an export business loan, businesses have to prove that they have been operational for at least a year prior to application. They also have to prove that the loan required can help businesses generate greater revenue via export sales. The SBA guarantees 90% of the loan in this program.

An express version of the export loan program is also available, in which borrowers can get their application approved in as little as 24 hours. However, these loans have a maximum amount of $500,000.


  • Short-term working capital expenses
  • Stabilize or improve export sales
  • Basic infrastructure repairs in the export system

Economic Injury Disaster Loan

The Economic Injury Disaster Loan (EIDL) program is another SBA-backed program. This one operates mainly to provide disaster relief to small businesses in the US. However, the program is also functional for businesses affected by the COVID-19 pandemic.

The SBA EIDL program applies to businesses that have suffered physical harm from a natural disaster or economic injuries caused by a changing economic environment. This loan program allows businesses to avail loans worth $2 million max. The loan terms can be as long as 15-30 years.


  • Pay rent
  • Maintain utility services
  • Payroll protection
  • Accounts payable
  • Fixed business expenses

Payroll Protection Program

Although this has expired, the PPP was originated under the efforts of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It's an SBA-backed, federally guaranteed loan program to assist small American businesses to stay afloat while facing post-COVID economic setbacks.

The Payroll Protection Program has pretty lenient terms, especially in terms of loan payment and loan defaulting. Self-employed individuals, sole proprietorships, and independent contractors are eligible for this loan.


  • Mortgage, rent, and lease payments
  • Utilities
  • Operational expenses
  • Supplier costs
  • Worker healthcare and security
  • Uninsured property damage

Final Thoughts

The SBA has a pretty diverse range of economic prosperity programs. These can be used by small businesses for different purposes under different conditions and payment requirements.



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