SBA loans carry the lowest rates available to most small businesses because a portion of the loan is guaranteed by the U.S. Small Business Administration. That guarantee lets lenders extend longer terms and lower pricing than a conventional business loan would allow. Rates start at Prime +2%.
| Requirement | $50K – $150K | $150K – $350K | $350K – $5M |
|---|---|---|---|
|
Interest rate |
Prime + 3% to 4.5% |
Prime + 2.75% to 4.5% |
Prime + 2% to 3% |
|
Minimum credit score |
640 |
660 |
650 (lower by exception) |
|
Time in business |
2 years |
2 years |
2 years |
|
Minimum annual revenue |
$125,000 |
$250,000 |
$500,000 |
|
Debt service coverage |
1.15x business |
1.15x business |
1.25x business, 1.10x global |
|
Bankruptcy |
None in last 2 years |
None in last 3 years |
None in last 3 years |
|
Time to close |
15 days |
30–45 days |
60 days |
|
Use of bunds |
Working capital |
Working capital, debt refinance, equipment, inventory |
Working capital, building & leasehold improvements, debt refinance, equipment, inventory, commercial real estate, business acquisition, expansion |
Rates are variable and tied to the Wall Street Journal Prime Rate. The spread over Prime depends on loan size, term, and credit profile. All figures are subject to credit approval and can change without notice.
The same core file works for every tier:
Larger requests may require additional financial detail during underwriting. We’ll tell you exactly what’s needed before you gather anything.
Your debt service coverage ratio measures whether the business generates enough cash to cover its loan payments. At the $50K–$350K sizes we need 1.15x — meaning the business produces 15% more cash than its annual debt obligations. Above $350K, the requirement rises to 1.25x on the business and 1.10x globally, which factors in the owner’s personal obligations alongside the business.
Two underwriting details work in your favor and are frequently missed:
If your DSCR falls short, the fix is usually a longer term or a smaller request — not a different lender.
Beyond the sizing thresholds above, every SBA borrower has to clear the program’s own eligibility tests. Your business must:
Outstanding taxes are not automatically disqualifying. On the $50,000–$150,000 tier, taxes owed are acceptable as long as you have an active IRS payment plan. This is one of the most common reasons business owners assume they can’t qualify — and it’s usually wrong.
Yes. SBA 7(a) proceeds can be used for working capital, equipment, inventory, debt refinance, and business acquisition with no property involved. The occupancy requirement applies only when SBA proceeds are used to purchase or improve commercial real estate.
If you are buying property to operate your business from, see SBA loans for commercial real estate.
640 for requests up to $150,000, 660 from $150,000 to $350,000, and 650 above $350,000 — with exceptions available on larger loans for strong files. Credit is one input; time in business, revenue, and cash flow coverage matter as much.
$125,000 in annual revenue for the smallest tier, $250,000 in the middle tier, and $500,000 for requests above $350,000.
Requests between $50,000 and $150,000 can close in about 15 days. Mid-size requests run 30–45 days, and loans above $350,000 typically take about 60 days because of the additional underwriting and SBA review.
If you need capital faster than that, a business term loan funds in 1–2 weeks — at a higher cost.
SBA 7(a) rates are variable and tied to the Prime Rate plus a margin. The margin narrows as loan size increases — from Prime +3–4.5% on the smallest tier down to Prime +2–3% above $350,000. Because the rate floats with Prime, your payment moves over the life of the loan.
Repayment term depends on what the money is used for: up to 7 years for working capital, up to 10 years for equipment, and up to 25 years when SBA proceeds are used for real estate.
Longer terms mean lower monthly payments, which improves your debt service coverage ratio — one reason a request that doesn’t qualify at 5 years may qualify at 7.
We collect a $1,500 refundable underwriting fee upfront, which becomes non-refundable if you accept an offer and then don’t close, plus approximately 1 point of the loan amount at closing.
The SBA and lender charge separately: an SBA guarantee fee that varies by loan amount and term, a packaging fee for preparing the application, ongoing servicing fees, and standard closing costs.
Compared with a business term loan at a 5% origination fee, SBA fee structure is meaningfully cheaper — which is the trade you’re making for a longer timeline.
Yes, and it’s a common use. SBA financing can refinance existing business debt when it materially improves your terms — a lower rate, a longer repayment period, or better monthly cash flow. Debt refinance is an eligible use of proceeds on requests above $150,000.
Yes, on requests above $350,000. Business acquisition is an eligible use of proceeds at that tier, along with expansion and commercial real estate.
Often yes. On the $50,000–$150,000 tier, taxes owed are acceptable as long as you have an active IRS payment plan in place.
Collateral may be required depending on loan size, but the SBA does not deny a loan solely because collateral is insufficient. Working capital requests at the smaller tiers are generally less collateral-intensive than acquisition or real estate financing.
These are 7(a) loans. The 504 program is a separate SBA product limited to fixed assets — owner-occupied commercial real estate and long-life equipment — and it can’t be used for working capital, inventory, or business acquisition.
If you’re buying a building rather than funding operations, it’s worth comparing both. See SBA loans for commercial real estate for how the two differ.
* All rates & requirements listed on this page are subject to change without notice.
Contact Standout Loans and an advisor will help you determine the best loan for your scenario.
You’ll be assigned to a Standout Commercial Loans expert who will guide you through the process.
Your loan expert will present you with the best available options for your loan.
