Moonshine Capital
SBA Loans
Low-interest funding for new and existing businesses.
SBA loans may help you start or grow your business with loans that carry lower interest rates, low down payments and favorable terms. The SBA doesn’t make small business loans, though. Individual lenders make SBA loans, which are typically guaranteed in part by the U.S. Small Business Administration (SBA), a federal government agency.
What's the difference between an SBA Loan vs. an Online Business Loan?
When it comes to finding the best small business loan or financing for your business, there are a lot of factors to consider. Interest rates, quick funding options, how much you need, and the qualifications you have are all factors to think about before applying for business financing. This video compares two common options to help you understand the pros and cons of each and determine which would be better for your business.
Types of SBA Loans
There are many different types of SBA loans programs out there, with three programs being the most popular:
The 7(a) Loan Program
The Microloan Program
The CDC/504 Loan Program
The most popular type of SBA guaranteed loan. These loans may be used for a variety of purposes including new construction, expansion or renovation, or to purchase land or buildings; to purchase equipment, fixtures, leasehold improvements; working capital; to refinance debt for compelling reasons; for a seasonal line of credit, inventory or starting a business.
Terms: The maximum loan amount is $5 million. Most 7(a) loans offer 10-year repayment periods, however, loans for equipment may extend to 25 years (or useful life) and real estate loans may also extend repayment periods of up to 25 years.
The Paycheck Protection Program (PPP) falls under the 7(a) program and was created by The CARES Act to help businesses impacted by the coronavirus crisis. Congress allocated funds for this program that lends small business owners up to $10 million based on payroll costs. Loans are made by participating lenders, not the SBA. If funds are spent properly, the PPP borrower can apply for loan forgiveness through its PPP lender,, and may qualify to have the entire loan forgiven. Learn more about PPP loans here.
These are smaller loans (up to $350,000) with a faster turnaround for approval. They are currently the most popular SBA loan program in terms of total amounts funded. Both term loans and lines of credit are available under this program. These loans may be used for the same purposes as 7(a) loans.
Note: As part of The CARES Act, Congress temporarily raised the limit for SBA Express loans to $1 million through December 31, 2020.
Terms: For term loans, the repayment period is the same as 7(a); lines of credit (LOCs) may go up to 10 years including a term out period where no additional funds can be drawn.
This program provides small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization. Loans are made through partnership with a non-profit Certified Development Company (CDC) and a private lender. They are typically structured where CDC provides 40% of total project costs (and the SBA guarantees that portion of the loan), the lender covers up to 50% and the borrower contributes 10-20%. These loans can be great for acquiring owner-occupied real estate. (The owner must occupy 51% or more of the property depending on the type of loan.)
Terms: There is no total maximum project loan amount, but the maximum SBA loan amount (debenture) is $5 million. (Certain energy projects or small manufacturers may qualify for up to $5.5 million.) Loan repayment periods are 10-25 years.
These smaller loans are made by non-profit community-based organizations. Loan proceeds may be used for working capital, supplies, machinery and equipment, fixtures, etc. They may even be used to refinance debt to improve cash flow. (And some lenders make these SBA loans to startups.)
Terms: The maximum loan amount for the SBA Microloan Program is $50,000 and the average is about $13,000. They will be made for the shortest term possible, up to 6 years.
The SBA Disaster Assistance program offers loans to qualified businesses to help them recover. These loans can be used by businesses that have sustained economic damage in a declared disaster area. Business Physical Disaster Loans can be used to repair or replace disaster-damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment. Note businesses of any size may be eligible. Economic Injury Disaster Loans (EIDL) are working capital loans to help small businesses and non-profits meet financial obligations that can’t be met as a direct result of the disaster.
Terms: The maximum loan amount is generally $2 million. The maximum term is 30 years (7 years if credit is available elsewhere.)
SBA International Trade Loans
These loans are designed for U.S. small businesses engaged in or preparing to engage in international trade, as well as those hurt by competition from imports. The borrower must demonstrate they will use this financing to significantly expand an existing export market or develop new export markets, or that the business has been hurt by import competition and proceeds will be used to improve its competitive position.
Terms: The maximum loan amount is $5 million. Repayment terms are the same as 7(a) loans: borrowers have up to 10 years to repay the loan, but up to 25 years of useful life for equipment or real estate.
SBA Export Working Capital Loans
These are short-term, working-capital loans for exporters. Proceeds from one of these export loans may be used for a variety of purposes, including to purchase inventory for export or to manufacture items for export, working capital directly related to export activities, and even refinancing.
Terms: This program allows loans of up to $5 million with maximum terms of three years. Shorter repayment terms feature a lower SBA guaranty fee.
SBA Export Express Loans
These loans can be used for virtually anything that will help your small business enter or grow an export market. Designed to be more streamlined with reduced documentation requirements.
Terms: The maximum loan amount is $500,000 and these lines of credit may have terms of up to 7 years.
Community Advantage
This pilot loan program offers loans through mission-oriented lenders, which are usually nonprofit financial intermediaries focused on economic development. There is a focus on business owners in underserved markets.
Terms: The maximum loan amount is $250,000. These loans carry a maximum term of 10 years for working capital; 10 years or the useful life of equipment; and 25 years for real estate.