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The U.S. Small Business Administration (SBA) loan programs are offered through approved lenders throughout the U.S. These lenders must follow SBA guidelines on lending to small businesses through the program but have some flexibility on setting their terms and conditions for lending.
Borrowers can choose to apply with a lender based on their location, what type of loan they want and how they intend to use the funds.
Learn more about the best SBA lenders for each SBA loan program and how to find the right one for your small business.
Page written by Kat Cox. Last reviewed on August 12, 2024. Next review due October 1, 2025.
While the SBA guarantees their loans, the money itself is lent out by approved SBA lenders. These lenders are usually banks, credit unions or other financial institutions that have been approved to administer the loans and manage them.
SBA loans have requirements in terms of which small businesses can qualify and how, as well as limits on interest rates and repayment terms. An approved SBA lender will have to follow these requirements when issuing a loan, although they have some flexibility to set certain terms, usually based on the eligibility of the borrower.
The best SBA lender for your loan will depend on what type of SBA loan program you apply to and what you’re using the loan for. You may want to consider applying for the loan through your local bank or credit union or a financial institution you have a relationship with. But there are a number of national banks and financial institutions that have a long history of administering SBA loans and will be able to provide you with insight into how to apply and secure the best loan for your needs.
The most common SBA loan programs are the SBA 7(a) program and the SBA 504/CDC loan program. You may also consider an SBA Microloan if you are looking for a smaller sum of money.
The SBA 7(a) program is the most popular loan program offered by the SBA. You can use an SBA 7(a) loan for a multitude of reasons, including working capital, equipment purchases and commercial real estate. With an SBA 7(a) loan, you can get up to $5 million with attractive repayment rates and terms. Take a look at some of the most popular national financial institutions that manage SBA loans below.
Live Oak Banking Company bills itself as the nation’s top SBA lender, and they loan money to hundreds of companies every year through the SBA program. The bank is part of the SBA Preferred Lender program, which allows them to make final credit decisions without going through the SBA, offer longer repayment terms, lower payments and no prepayment penalties and often get you a response to your application up to four weeks earlier than other lenders. They have a deep understanding of SBA loan processes and procedures and can provide personalized service to help you find the right loan structure for your company’s goals.
As the number one SBA lender in its region, Huntington National Bank helps small business owners secure SBA 7(a) loans in any part of the U.S. The bank is part of the SBA Preferred Lender Program, which gives them authority to make final decisions on your loan. They have a dedicated team of SBA specialists, including underwriters and closers as well as tools and customer support to help you manage your loan. Their Lift Local Business program was designed to help woman-, veteran- and ethnically diverse-owned businesses find more opportunities to build their companies.
Newtek is a direct lender that offers financing for small businesses. Although they’re not a traditional bank, they are FDIC insured and they are an approved and preferred SBA lender. They help other financial institutions by taking on SBA loans that they can’t or won’t fund. This may mean you have a better chance of having your SBA loan approved by NewtekOne than other lenders.
The Celtic Bank Corporation offers SBA 7(a) loans with rates as low as prime +2.75% and terms up to 25 years. They also provide a loan calculator to help you determine how much money you need and how much you can afford to borrow. Headquartered in Salt Lake City, UT, they provide SBA loans to companies around the United States.
Another member of the SBA Preferred Lender Program, Byline Bank administers SBA loans for thousands of business owners nationwide. Their SBA loans start at $350,000 and they provide borrowers with a number of tools to help them apply for and manage their SBA loans. With years of experience and a dedicated team, they’ll help you structure a loan for your exact business needs.
Ready Capital or Readycap Lending in a non-bank that administers SBA 7(a) loans that other traditional lenders can’t or won’t finance. This may include loan applications from borrowers with lower credit scores or other risk factors like low time in business. They provide personalized support through a Small Business Development Officer and boast rapid approval processes and nationwide coverage.
Wells Fargo is a large national bank that offers many SBA 7(a) loan options for small businesses. As an SBA Preferred Lender, they manage hundreds of SBA loans across the country every year. They actually lend the most money to small businesses of any other national bank and are the SBA’s largest lender in terms of volume.
Another non-bank option, Harvest Small Business Finance is another option for borrowers who may not meet the requirements of larger bank lenders. They’re one of only 14 non-bank lenders approved by the SBA to manage SBA 7(a) loans and have been offering these services to small businesses since 2016.
Enterprise Bank & Trust has more than 150 years of collective experience to offer small businesses who need help navigating the SBA loan process. They are an SBA Preferred Lender, which means faster approval times. They’re also a member of the National Association of Government Guaranteed Lenders, which provides them even more expertise on finding the right loan for your small business needs.
Another large national bank, U.S. Bank is also an SBA Preferred Lender. They offer personalized support from SBA bankers. They can also approve credit decisions without having to go back to the SBA for approval, so your loan application may go through faster than with other lenders. While they’re based in Minneapolis, they administer SBA loans across the country.
SBA 504/CDC loans are popular for small businesses that need money to buy or improve commercial real estate or get large equipment for their business. However, the SBA 504/CDC program is funded in a different way than an SBA 7(a) loan and is less straightforward.
In most cases, a bank or credit union will fund half of an SBA 504/CDC loan. The second half is funded by a Community Development Corporation (CDC), which are registered 501(c)(3) non-profit companies whose purpose is to improve their local communities and the borrower, providing 40% and 10% of the loan respectively. CDCs are community-based partners that are certified and regulated by the SBA.
SBA 504/CDC loans can only be given to borrowers whose projects will promote business growth and job creation. This is determined through the application process by the CDC.
Most of the larger national banks, including Wells Fargo, Chase, Bank of America and U.S. Bank, administer SBA 504/CDC loans. However, the borrower has to find a local CDC to work with, which you can do through the SBA’s search tool or by speaking with your local SBA office.
SBA Microloans are meant for small businesses that may have difficulty securing more traditional business funding. These loans are for much smaller amounts – up to $50,000, although the average microloan is about $13,000.
Unlike SBA 7(a) and SBA 504/CDC loans, SBA Microloans are not managed by banks or traditional financial institutions. Instead, non-profit, community-based organizations get funds directly from the SBA and issue the microloan to approved borrowers.
SBA Microloan lenders work in their specific regions, so as a borrower, you’ll have to find your own microloan intermediary. You can do this on the SBA’s website.
The right SBA lender for you will depend on where your business is located, what industry you operate in, your qualifications and what you intend to use the funds for. The SBA offers a lender match system on its website that can find good options for you through a few quick questions. This match system can take two days to send you a list of lenders that you will contact on your own.
It’s also a good idea to check with your local bank or the bank you do business with already to see if they have SBA programs available. Many banks and credit unions will put their existing customers first, providing personalized service for customers they already have a relationship with. According to the Federal Reserve Bank of St. Louis, smaller, local banks actually lend more of their assets to small businesses than bigger banks, even though they may do less total volume.
However, just because you use a local bank for your business banking doesn’t mean they’ll be the right fit for you. Your qualifications for an SBA loan should also play a role in helping you find the right SBA lender. For instance, non-banks may have lower thresholds for credit score requirements or time in business criteria thank traditional banks or credit unions.
Finally, make sure you understand the financial institution’s application processes for SBA loans. It’s a good idea to find a lender who will provide you with personal assistance through a designated loan specialist, especially if it’s your first time applying for an SBA loan. Check their approval times and other timelines as well. You may want to apply with an SBA Preferred Lender to cut down on wait times.
Because SBA loans offer attractive repayment rates and terms, they’re also extremely popular. This can also mean they’re extremely competitive, and it can be difficult to get an SBA loan approved, especially if you have lower credit scores or haven’t been in business for very long.
There are a number of other business loans available to small businesses, including online loans, startup loans, microloans and even grants. Other types of financing, such as business credit cards or lines of credit, may be easier to qualify for. While these options may not offer the attractive interest rates and repayment terms of SBA loans, they may be easier to get and faster to fund, depending on your lender. Always make sure you can afford to repay a loan before you secure it, and make sure you understand terms and conditions before accepting funding.
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