This page is general information, not legal, tax or financial advice. Talk to a qualified professional about your situation.
The SBA’s three main loan programs cover different needs. 7(a) loans go up to $5 million and are the general-purpose option. 504 loans give long-term, fixed-rate financing for major fixed assets; SBA’s 504 page gives a maximum of $5.5 million in its details (its summary line says up to $5 million). Microloans go up to $50,000, and SBA says the average is about $13,000. All three are debt: they give up no equity, but they have to be repaid.
The three programs
| Program | Maximum (SBA) | Typical use | Through |
|---|---|---|---|
| 7(a) | $5 million | Short- and long-term working capital and other general business uses | SBA-guaranteed loans from participating lenders |
| 504 | $5.5 million (page details; summary says up to $5 million) | Long-term, fixed-rate financing for major fixed assets | Certified Development Companies (CDCs) only |
| Microloan | $50,000 (average about $13,000) | Working capital and other small needs | Nonprofit, community-based intermediary lenders |
Check the current terms on SBA’s pages before applying; rates, fees and eligibility rules change.
When a loan is the wrong tool
A loan works when the business has a credible way to repay. If the company is shrinking or winding down, new debt can make things worse for owners who sign personal guarantees. Alternatives that add no debt include tax credits such as the R&D payroll tax credit, grants such as SBIR for research-heavy companies (see non-dilutive funding options), and revenue from assets the company already has. Licensing de-identified operational records to AI developers is one such asset for some established companies; micro1 publishes payouts of $100K to $3M+ per approved data package for companies with 30 or more employees.
Questions people ask
Does the SBA lend the money itself?
No. For 7(a) the SBA guarantees loans made by participating lenders, and you apply through a local lender. 504 loans are available only through Certified Development Companies, and microloans through nonprofit, community-based intermediary lenders.
Is an SBA loan non-dilutive?
Yes, a loan gives up no equity. It does add debt, and lenders may ask owners for a personal guarantee, which matters if the business is struggling.
Sources
Related guides
Non-dilutive funding options for small companies
Ways to raise cash without selling equity: R&D payroll credits, SBIR awards, SBA loans, revenue-based financing, asset sales and data licensing.
Using the R&D tax credit against payroll tax
How qualified small businesses apply up to $500,000 of the research credit against payroll tax, who qualifies, and what records the claim depends on.
How to sell your company's data to AI companies
How companies license operational data to AI developers: who buys, what they take, published size rules and payouts, the process and what to check first.
Part of Raising cash without new equity.