Want the best? Then You Want an SBA Loan

The US Small Business Administration (SBA) is a federal agency with the main purpose of helping small businesses get the funding they need to grow. During the coronavirus (COVID-19) pandemic, they stepped in to facilitate the PPP loan. Compare the best SBA loan options with Upwise.
What is an SBA Loan?
SBA loans are business loans guaranteed by the Small Business Administration. SBA guaranteed loans can range from small to large and can be used for most business purposes. With their multiple SBA funding programs, this government agency provides SBA loan guarantees of up to 85% of the loan amount provided through an SBA-approved lender— such as Upwise. The SBA agency reduces risk and enables easier access to capital for small business owners across the United States. The three main SBA loan programs let you borrow money for nearly any business purpose—including working capital, purchasing inventory or equipment, refinancing other debts, or buying real estate—through these SBA-guaranteed loans. Take into account that some SBA loan programs set restrictions on how you can use the funds, so make sure to check with your Upwise SBA loan specialist.
What is considered an SBA loan? The SBA stands for the Small Business Administration (SBA) and is the government agency that partially guarantees SBA loans and this agency was founded in 1953 to support small business owners financially across the United States. Here we will go over the costs, qualifications, use of proceeds, underwriting process, timeline to funding and more to help you determine whether this type of loan is the best option to finance the growth of your small business.
SBA Loan Details
$5K - $5 Million
3 Months - 2 Years
9.99% - 24.99%
As Fast As Same Day
SBA Loan Pros vs Cons
PROS
- Bad Credit Accepted
- Minimal Paperwork
- Quick & Fast Funding
- Suitable for a wide range of business purposes
- Prepayment Discounts for Early Payoff
CONS
- Annual Costs can be Higher than Longer Term Loans
- May Require a Personal Guarantee
- UCC may be Filed on Business
- May Require a Blanket Lien
How Does an SBA Loan Work?
SBA loans are originated by a bank and the SBA provides a guarantee on the loan, promising to reimburse the bank for a certain percentage of the loan in the event of a default. The SBA agency does not typically make direct loans which is a common misunderstanding amongst small business owners. The guarantee by the SBA lowers the risks to lenders, encouraging them to offer these loans to more American small businesses. Upwise has partnered with many banks and other financial institutions that offer SBA loans, but their process, requirements, and fees can vary.
Who Qualifies for an Small Business Administration Loan?
Securing an SBA loan for a small business is no easy task, but our team at Upwise is here to guide you through every step of the process. Many businesses, including small or newer businesses, can qualify for an SBA loan.
Take into account that the most important factor will be your credit score, the SBA requirement is a minimum of 620 FICO SCORE from ALL three credit bureaus. If you are a new business the SBA loan program has specific loans for starting a new business or acquiring an existing business.
Be prepared for the process: SBA loans usually require a lot of documentation, time, and energy. The underwriting process can be long if you are looking for more than $350k. Upwise offers an expedited SBA for any borrowers looking for a loan under $350k. For larger loan amounts the process from beginning to end is usually 30-45 business days depending on the borrower’s motivation to move quickly.
Don’t believe any broker or lender who promises to provide SBA loans in as fast as 1-2 business days. SBA loans take time to get approved and usually require the business to be showing a profit on the most recent business tax return.
Applying for an SBA loan can be difficult to qualify for if your company has a limited track record of paying off-trade lines or has a poor business credit score. After all, credit and trade line payment history is the most important aspect when the SBA-approved lender evaluates a borrower’s reliability.
Do not worry, Upwise capital has secured many SBA loans for clients in the past and can easily navigate your business through the SBA process to a successful funded SBA loan.
SBA Loan Requirements
Over $200K
Over 650+
2 Years +
Over 10% Profit Shown on Tax Returns
* Note: These SBA Loan requirements are based on previous Upwise customers and is just an average.
Types of SBA Loans
Maximum Loan Amount: $5 Million
Maximum SBA Guarantee: 85% for loans up to $150,000 and 75% for loans greater than $150,000
Interest Rate: Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
Eligibility Decision: By the SBA. Qualified lenders may be granted delegated authority (PLP) to make eligibility determinations without SBA review.
Revolving Lines of Credit: Up to 10 years (Permitted only under CAPLines submission. See below)
SBA Turn Around Time: 5-10 business days
Forms: SBA Form 1919 and SBA Form 1920 are required for every loan (other SBA Forms may be required)
Collateral: Lenders are not required to take collateral for loans up to $25,000. For loans in excess of $350,000, the SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount. If business fixed assets do not “fully secure” the loan the lender may include trading assets (using 10% of current book value for the calculation), and must take available equity in the personal real estate (residential and investment) of the principals as collateral.
Credit Decision: By the SBA. Qualified lenders may be granted delegated authority (PLP) to make credit decisions without SBA review.
Maximum Loan Amount: $350K
Maximum SBA Guarantee: 85% for loans up to $150,000 and 75% for loans greater than $150,000
Interest Rate: Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
Eligibility Decision: By the SBA. Qualified lenders may be granted delegated authority (PLP) to make eligibility determinations without SBA review.
SBA Turn Around Time: 5-10 business days
Forms: SBA Form 1919 and SBA Form 1920 are required for every loan (other SBA Forms may be required)
Collateral: Lenders are not required to take collateral for loans up to $25,000. For loans over $25,000, up to and including $350,000, the lender must follow the collateral policies and procedures that it has established and implemented for its similarly-sized non-SBA-guaranteed commercial loans, but at a minimum the lender must take a first lien on assets financed with loan proceeds and lender must take a lien on all of the applicant’s fixed assets including real estate. Lender is not required to take a lien against applicant’s real estate when the equity is less than 25% of the fair market value. The lender may limit the lien taken against real estate to the loan amount.
Credit Decision: By the SBA. Qualified lenders may be granted delegated authority (PLP) to make credit decisions without SBA review.
The SBA Express program features an accelerated turnaround time for SBA review. The SBA will respond to your application within 36 hours.
Maximum Loan Amount: $350K
Maximum SBA Guarantee: 50%
Interest Rate: Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
Eligibility Decision: Made by the lender
Revolving Lines of Credit: Up to seven years with maturity extensions permitted at the outset
SBA Turn Around Time: Within 36 hours
Forms: Lender primarily uses own forms and procedures, plus SBA Form 1919
Collateral: Lenders are not required to take collateral for loans up to $25,000. May use their existing collateral policy for loans over $25,000 up to $350,000.
Purchase: Lender may request expedited SBA purchase on small loans or in situations where liquidation may be delayed.
The SBA 504 Loan Program provides approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion. 504 SBA loans are made available through Certified Development Companies (CDCs), SBA’s community based partners for providing 504 Loans. Upwise has secured many SBA 504 loans for our clients who are trying to acquire assets,equipment, land, and buildings or renovate existing real estate owned outright.
504 Loan Structure
Understanding the loan structure is very important to securing an SBA 504 Loan. Now these 504 loans are typically structured with the SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing 10% of the project costs. In some cases a borrower may be required to contribute up to 20% of the total project costs. Be prepared to put down at least 10% of the purchase price or project costs.
504 Loan Example
Total 504 projects costs for a $1,200,000 project may include the following (eligibility requirements apply to the 504 portion of the project as well as the participating lending portion):
- Building Purchase
- Land
- Renovation
- Furniture and Equipment
- Soft Costs
- TOTAL $1,200,000
Loan Structure
- $600,000, 1st lien with bank (loan obtained from a private sector lender covering up to 50% of the total project cost)
- $450,000, 2nd lien with 504 SBA loan, 20 year, fixed rate (loan obtained through a CDC, funded through an SBA-guaranteed debenture, covering up to 40% of the total project cost)
- $150,000, borrower contribution (contribution from the borrower of at least 10% of the total project cost/)
How 504 Loan Funds May Be Used
The use of proceeds from 504 Loans must be used for fixed assets (and certain soft costs), including:
- The purchase of existing buildings
- The purchase of land and land improvements, including grading, street improvements, utilities, parking lots and landscaping
- The construction of new facilities or modernizing, renovating or converting existing facilities;
- The purchase of long-term machinery ; or
- The refinancing of debt in connection with an expansion of the business through new or renovated facilities or equipment*.
The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing (except for projects with an expansion component or that meet the temporary refinancing provisions of the Small Business Jobs Act of 2010).
504 Loan Benefits for the Small Business
The 504 Loan program offers small businesses both immediate and long-term benefits to help small business owners grow their business.
Benefits of the SBA 504 Loan Include:
- Low Interest Rates
- 80 – 90% financing – depending on the down payment required
- Longer loan amortizations, no balloon payments
- Fixed-rate interest rates
- Savings that result in improved cash flow for small businesses
504 Loan Eligibility
To be eligible for an SBA 504 Loan, your business must be operated for profit and cannot be made to businesses engaged in nonprofit, passive or speculative activities. In order to qualify for an SBA 504 loan, the borrower and business must fall within the size standards set by the SBA. Under the 504 Program, a business qualifies only if it has a tangible net worth not more than $15 million, and an average net income of $5 million or less after federal income taxes for the preceding two years prior. For additional information on eligibility criteria and loan application requirements please contact an Upwise SBA loan specialist.
Collateral
Generally, the project assets being financed are used as collateral. Personal guaranties from owners of 20% or more are also required on all SBA 504 loans.
Interest Rates and Fees
Interest rates on 504 Loans are directly correlated with the current market rate for 5-year and 10-year U.S. Treasury issues. Loan maturities can range and terms of 10 and 20 years are available. Fees may also be financed with the loan.
504 SBA Loan Refinancing Available
Example of Refinancing of an existing loan
- Current Appraised Value of Property – $1,400,000
- Outstanding Debt – $1,000,000
- 90% LTV – $1,260,000
Loan Structure
- New Bank Loan (Bank of Trust) – $700,000
- New 504 Loan – $560,000
- Borrower contribution (down payment or equity) – $140,000
- Working capital (from loan proceeds) – $260,000
504 Loan provides fixed-rate, long-term financing for up to 20 years
The Export Express program provides exporters and lenders a streamlined method to obtain SBA-backed financing for loans and lines of credit up to $500,000. Lenders use their own credit decision process and loan documentation. The SBA will respond to your application within 24 hours.
Maximum Loan Amount: $500K
Maximum SBA Guarantee: 90% for loans of $350,000 or less, 75% for loans more than $350,000
Interest Rate: Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
Eligibility Decision: Made by the lender
Revolving Lines of Credit: May not exceed seven years
SBA Turn Around Time: 24 Hours
Forms: Lender primarily uses own forms and procedures, plus SBA Form 1919, Borrower Information
Collateral: Lenders follow collateral policies and procedures that the lender has established for its non-SBA-guaranteed loans.
Credit Decision: Made by the lender
Export Working Capital loans are for businesses that can generate export sales and need additional working capital to support these sales. Lenders review and approve applications and submit the request to the U.S. Export Assistance Center location servicing the exporter’s region.
Maximum Loan Amount: $5 Million
Maximum SBA Guarantee: 90%
Interest Rate: Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
Eligibility Decision: By the SBA. Qualified lenders may be granted authorization to make eligibility decisions.
Revolving Lines of Credit: Terms of 12 months or less
SBA Turn Around Time: 5-10 business days
Forms: SBA-EIB 84-1, plus attachments
Collateral: Export-related inventory and receivable generated by export sales financed with EWCP funds. The SBA also requires personal guarantee of owners with 20% or more ownership.
Credit Decision: Made By the SBA.
International Trade loans provide long-term financing to businesses that are expanding because of growing export sales, or that have been adversely affected by imports and need to modernize to meet foreign competition.
Businesses can use International Trade loans for fixed assets for construction, building, real estate equipment, and for working capital for export transactions.
Maximum Loan Amount: $5 Million
Maximum SBA Guarantee: 90%
Interest Rate: Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum
Eligibility Decision: Made By the SBA.
Loan Maturity: 10 years for permanent working capital, up to 10 years for machinery and equipment or the useful life of the equipment (not to exceed 15 years), and up to 25 years for real estate.
SBA Turn Around Time: 5-10 business days
Credit Decision: Made By the SBA.
What Does an SBA Loan Cost?
SBA loans tend to be the least expensive financing options available to small business owners. SBA rates can vary depending on the lender that you work with, but all interest rates must be within SBA guidelines.
The SBA establishes the minimum and maximum amount that can be charged for these loans. SBA loans from Upwise marketplace banks can have fixed or variable interest rates and depend on the loan amount, lender and SBA loan type. SBA interest rates are based on the Wall Street Prime Rate + anywhere from 2.25 – 4.25% depending on the loan product.
How to get an SBA Loan
We make it easy, simply apply online and we’ll be in touch to go over your options.


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Documents You'll Need to Apply
- Completed Application
- Driver’s License
- Voided Business Check
- Business Bank Statements (Last 6 Months)
- Credit Application
- Balance sheets
- Profit & Loss Statements
- 2 Years Business Tax Returns
- 2 Years Personal Tax Returns
- Account Receivables Report (if securing AR)
- Inventory List (if securing inventory)
- Equipment List (if securing equipment)
- Collateral Information
*See above for SBA loan requirements.
SBA Loans

SBA loans are the best loan options available to small business owners in the marketplace. SBA loans are government-backed loans that will come in at the best interest rate available and are considered the gold standard of loans for small business owners looking to expand their business in a variety of different ways.