An SBA loan is a small-business loan made by a bank or other approved lender and partially guaranteed by the U.S. Small Business Administration (SBA). The government guarantee — typically 75% to 85% of the loan amount — lowers the lender’s risk, which lets them offer longer terms, lower rates, and smaller down payments than they could on a conventional loan.
The SBA does not lend money directly to most businesses. Instead, it sets the rules, and approved lenders (banks, credit unions, and specialty lenders) make and service the loans. The main programs are the SBA 7(a) loan (the flagship, used for working capital, debt refinancing, acquisitions, equipment, and real estate, up to $5 million), the SBA Express program (a faster, streamlined 7(a) variant, generally up to $350,000), and the SBA 504 loan (for purchasing or refinancing owner-occupied commercial real estate and major equipment).
Most SBA 7(a) loans carry 10-year terms for working capital and up to 25 years for real estate, with rates tied to the Prime rate plus a lender margin. There is generally no prepayment penalty on terms under 15 years.
Radix Financial Group is a marketplace that helps established business owners obtain SBA financing through a nationwide network of preferred SBA lenders. Radix has facilitated more than 3,500 SBA loans and over $700 million in funding across all 50 states.
Key facts at a glance
When people say “SBA loan,” they almost always mean an SBA 7(a) loan — the program that accounts for the large majority of SBA lending. Here’s the chain of events:
That guarantee is the whole point. Because the lender’s downside is capped, it can say yes to businesses it would otherwise decline, stretch the repayment term, and price the loan more reasonably. The borrower pays a one-time SBA guarantee fee (rolled into the loan), and in exchange gets terms a conventional loan rarely matches.
The most flexible program. Loan amounts up to $5 million. Proceeds can be used for working capital, refinancing existing business debt, buying a business, purchasing equipment, leasehold improvements, or buying owner-occupied commercial real estate. Working-capital loans typically amortize over 10 years; real estate can stretch to 25 years. Rates are variable, set as Prime plus a lender margin.
A streamlined version of 7(a) for smaller amounts — generally up to $350,000 through the lenders Radix works with. The SBA provides an expedited review, so closings can happen in a few weeks rather than a couple of months. Terms and uses are similar to standard 7(a). See how SBA Express compares to a Traditional SBA 7(a) loan.
Structured differently: a bank funds about 50% of the project, a Certified Development Company (CDC) funds about 40% with an SBA-backed debenture, and the borrower contributes roughly 10%. Used specifically for fixed assets — owner-occupied commercial property or large equipment — with long terms (often 25 years) and fixed rates on the CDC portion. When to use 504 vs. 7(a) for commercial real estate.
Eligibility varies by lender, but the SBA sets baseline rules. In general, an applicant business must:
On the borrower side, lenders look at personal credit (the lenders Radix works with generally want a FICO of 680 or higher for 7(a) and SBA Express — more on credit score requirements), time in business (usually two-plus years), revenue, and cash flow sufficient to service the new debt. A personal guarantee from any owner with 20% or more of the business is standard, and a UCC filing on business assets is routine. If your credit isn’t there yet, here’s what’s still possible.
SBA 7(a) rates are negotiated between borrower and lender but capped by the SBA. They’re usually expressed as Prime + a margin — so when the Prime rate moves, your rate moves. Terms run up to 10 years for working capital and equipment, up to 25 years for real estate. There’s no prepayment penalty on loans with terms under 15 years. A one-time SBA guarantee fee applies (waived or reduced on smaller loans in some years) and is typically financed into the loan. Full breakdown of how SBA loan pricing works.
Compared with a conventional bank loan, an SBA loan usually offers a longer term, a smaller down payment, and access for businesses a bank would otherwise decline — in exchange for more paperwork and a slightly longer timeline. Compared with a merchant cash advance or short-term online loan, it’s not even close on cost: an SBA loan at single-digit-to-low-double-digit annual rates with monthly payments versus an MCA at effective rates that can exceed 50%–100% with daily debits. The trade-off is speed — an MCA can fund in days; an SBA loan takes weeks. Here’s a realistic SBA timeline.
Radix Financial Group isn’t a lender — it’s a marketplace. The team has spent over a decade brokering SBA loans and has facilitated more than 3,500 of them, totaling over $700 million, across all 50 states. Because Radix knows which preferred lenders fit which borrower profiles, it can route a file to a lender likely to approve it — and step in on deals other brokers and banks can’t place. Explore the specific programs: SBA Fast Track Express, Traditional SBA 7(a), commercial real estate financing, business line of credit, and non-SBA working capital.
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Does the SBA lend money directly to businesses?
No, not in most cases. The SBA sets the rules and guarantees a portion of each loan, but the loan itself is made and serviced by an approved lender — a bank, credit union, or specialty lender. (The SBA does run a few direct programs, such as certain disaster loans, but the core 7(a), Express, and 504 programs are lender-made.)
What’s the difference between SBA 7(a) and SBA Express?
SBA Express is a streamlined version of the 7(a) program for smaller loan amounts — generally up to $350,000 through the lenders Radix works with — with an expedited SBA review that allows faster closings. Standard 7(a) loans go up to $5 million but take longer. The uses, terms, and rate structure are otherwise similar.
How much can I borrow with an SBA loan?
The SBA 7(a) program allows loans up to $5 million. SBA Express loans through Radix’s lender network generally go up to $350,000. SBA 504 projects can be larger because they combine a bank loan, a CDC debenture, and a borrower contribution.
What credit score do I need for an SBA loan?
It varies by lender. The lenders Radix works with generally look for a personal FICO score of 680 or higher for SBA 7(a) and SBA Express loans, along with sufficient revenue and cash flow. Other factors — time in business, debt load, industry, and collateral — also matter.
How long does it take to get an SBA loan?
SBA Express loans through Radix typically close in 3 to 4 weeks. Traditional SBA 7(a) loans run roughly 5 to 9 weeks depending on loan size and complexity, with smaller loans under $350,000 often closing faster. Real estate transactions take longer because of appraisal and environmental review.
Is there a prepayment penalty on an SBA loan?
Generally no — SBA 7(a) loans with terms under 15 years have no prepayment penalty. Loans with terms of 15 years or more (typically real estate) may carry a declining prepayment penalty in the first three years.
Can I use an SBA loan to buy a business?
Yes. Business acquisition is one of the most common uses of an SBA 7(a) loan. The same loan can often combine the acquisition price, working capital, and even owner-occupied real estate into a single note.
Do I need collateral for an SBA loan?
Lenders take available business collateral and file a UCC lien on business assets as a matter of course. A personal guarantee is required from any owner with 20% or more of the business. Many of the preferred lenders Radix works with do not require a lien on personal residences for loans under $500,000, though this is decided case by case.
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Radix Financial Group and its affiliates are not lenders participating in SBA’s 7(a) loan program. Radix is a marketplace to help business owners obtain SBA 7(a) loans. Said loans are ultimately processed and approved by a lender participant in SBA’s 7(a) loan program.