A startup can apply for business loans in two ways: through SBA-backed programs, or through private lenders such as banks and online lenders. For a brand-new business, the two SBA programs to check first are the 7(a) loan, which goes up to $5 million, and the microloan, which goes up to $50,000 through nonprofit intermediaries. You apply through a lender or intermediary, not SBA itself, and that lender makes the credit decision and sets the terms.
How do I get a business loan if I just started a business?
Start with the SBA programs. The SBA’s microloan page says microloans help small businesses and certain not-for-profit childcare centers “start up and expand,” and that you apply through an SBA-approved intermediary in your area. Use a microloan when you need less than $50,000 to start or grow your business, for items such as working capital, inventory, supplies, furniture, fixtures, machinery and equipment.
For larger amounts, the 7(a) loan is SBA’s primary business loan program. SBA does not lend 7(a) money directly, so you apply to a local lender. SBA’s Lender Match tool can match you with a participating lender, and SBA’s 7(a) loan page explains the program in full.
Two checks come first. SBA lists “Be an operating business” and “Operate for profit” among the 7(a) requirements, so if your business has not started operating yet, ask your lender how it reads that rule. The lender also decides which documents you need, because SBA’s 7(a) page says the application contents vary by loan size and the lender’s processing method.
usa.gov, a U.S. government site, says there are no federal grants for starting a business. It lists personal funds, finding investors and small business loans as ways owners fund a startup. usa.gov’s guide to starting and funding a business also points to SBA’s free or low-cost counseling and training.
Which SBA loan programs can a startup apply for?
Three SBA programs are the main options. The figures below come from SBA’s program pages as of October 28, 2026. All three are for for-profit small businesses located in the U.S.
| Program | Maximum amount | What it can pay for | Repayment details SBA lists |
|---|---|---|---|
| 7(a) loan | $5 million | Working capital, machinery and equipment, real estate, refinancing business debt, changes of ownership | Most term loans repaid with monthly principal and interest from business cash flow; fixed-rate payments stay the same; variable-rate payments can change |
| 504 loan | $5.5 million | Major fixed assets such as buildings, land and machinery with a useful life of at least 10 years | Long-term fixed rate; 10-, 20- and 25-year terms; rate pegged to an increment above the 10-year U.S. Treasury; cannot be used for working capital or inventory; available only through Certified Development Companies |
| Microloan | Up to $50,000; average about $13,000 | Working capital, inventory, supplies, furniture, fixtures, machinery, equipment; not existing debts or real estate | Maximum term of seven years; SBA says rates are generally between 8% and 13% and vary by intermediary |
Term loans, equipment loans and lines of credit all show up in these programs. A 7(a) loan can fund machinery and equipment, and the 7(a) Working Capital Pilot offers monitored lines of credit. To see how those structures differ, read working capital loans vs lines of credit.
What do SBA 7(a) loans cost in interest and fees?
On SBA’s 7(a) loans page, the Working Capital Pilot terms cap the interest a lender can charge above a base rate, and the cap depends on loan size.
| Loan amount | Maximum spread over the base rate |
|---|---|
| $50,000 and less | Base rate + 6.5% |
| $50,001 to $250,000 | Base rate + 6.0% |
| $250,001 to $350,000 | Base rate + 4.5% |
| $350,001 and higher | Base rate + 3.0% |
Ask your lender for the current upfront guaranty fee on a 7(a) loan, since it can change. The one 7(a) upfront fee listed here is for Export Working Capital Program loans:
| Loan size | Upfront fee |
|---|---|
| Export Working Capital Program loans of 12 months or less | 0.25% of the guaranteed portion |
For 504 loans approved from October 1, 2026 through September 30, 2027, SBA’s 504 fee notice sets an upfront guaranty fee of 0.50% and an annual service fee of 0.203% of the outstanding balance. SBA’s notice on SOP 50 10 8.1 says that procedure becomes effective October 1, 2026 for applications issued an SBA loan number on or after that date.
What is the monthly payment on a $50,000 business loan?
The SBA’s 7(a) loans page does not show a monthly payment for a $50,000 loan, and it does not set a rate for one. Your payment depends on three things: the interest rate, the term, and whether the rate is fixed. SBA says fixed-rate payments stay the same because the rate is constant, and variable-rate payments can change when the rate does.
The SBA ceiling for a loan of $50,000 or less is a spread of no more than 6.5% over the base rate. Prime is one of the base rates. The Federal Reserve’s H.15 release, dated October 27, 2026, lists it, and H.15 notes that “Prime is one of several base rates used by banks to price short-term business loans.”
To turn those figures into a payment, use the business loan calculator guide, then ask the lender for a written quote that shows the rate, term, fees and monthly payment.
What is the monthly payment on a $1,000,000 business loan?
The SBA’s 7(a) loans page does not show a monthly payment for a $1,000,000 loan. A loan of that size is within the 7(a) maximum of $5 million. Under the 7(a) Working Capital Pilot terms, a loan of $350,001 and higher can carry a spread of no more than 3.0% over the base rate. Ask the lender for the payment in writing, with the rate type, term and upfront fee.
Do you pay back SBA loans?
Yes. SBA’s 7(a) page says most 7(a) term loans are repaid with monthly payments of principal and interest from the business’s cash flow. Because SBA does not lend 7(a) money directly, you repay your lender. Microloan borrowers contact their microlender directly about balances and due dates. 504 borrowers with active loans can make payments through the Central Servicing Agent, usually by monthly ACH draws, and SBA’s 504 page says to contact your Certified Development Company for account questions.
Do I have to pay back an SBA loan if my business closes?
The SBA’s 7(a) loans page does not say what happens to repayment if a business closes. Ask your lender that question in writing before you sign, and ask whether you would be asked for a personal guarantee. In the Federal Reserve’s 2026 Report on Employer Firms, 59% of firms with debt said they used a personal guarantee to secure it, and 51% used business assets. That survey covers all debt, not SBA loans alone, so it shows what is common, not what your loan would require.
What are the downsides of SBA loans?
Each option has trade-offs. These are the ones the SBA and the Federal Reserve’s survey point to.
| Downside | What the source says |
|---|---|
| Fees on top of the loan | 7(a) upfront guaranty fees rise with loan size; 504 loans carry an upfront fee and an annual service fee (SBA fee notices) |
| Variable rates | Variable-rate payments can change when the rate changes (SBA 7(a) loans page) |
| Use limits | 504 loans cannot fund working capital or inventory; microloan proceeds cannot pay existing debts or buy real estate (SBA program pages) |
| Lender-dependent process | You work with a lender, not SBA, for 7(a) loans (SBA 7(a) loans page) |
| Personal guarantees | 59% of firms with debt used a personal guarantee (Federal Reserve, 2026 Report on Employer Firms) |
| Costs above expectations | In the same survey, 60% of borrowers from online lenders said actual borrowing costs were higher than expected, compared with 37% at small banks and 32% at large banks. High interest rates and unfavorable repayment terms were the most common challenges at online lenders. |
Can I get a $100,000 SBA loan?
The amount fits the 7(a) program, which goes up to $5 million. It does not fit a microloan, which tops out at $50,000. A 504 loan can reach $5.5 million, but only for major fixed assets, not working capital.
The 7(a) program also requires that the business be unable to obtain the desired credit on reasonable terms from non-federal, non-state and non-local government sources. It must be creditworthy and show a reasonable ability to repay. The SBA’s 7(a) loans page sets a $5 million maximum, but it does not show the amount any particular business would be approved for. The lender’s review decides what is approved.
Are there business loans for startups with bad credit?
The 7(a) program requires the business to be creditworthy. SBA Procedural Notice 5000-876777 says SBA discontinued the SBSS score for 7(a) Small loans effective March 1, 2026, and that SBA Express loans are not affected.
Bad-credit offers are where startups get misled. The FTC’s November 2025 release on Seek Capital and its CEO says the company advertised access to cash with no interest for extended periods. The FTC alleged it charged clients thousands of dollars to open credit cards, often without the promised 0% terms, and harmed their credit scores. Seek Capital and its CEO are now permanently banned from providing business financing, debt relief and credit repair services under the settlement.
Are there startup business loans with easy approval?
No SBA or federal page promises approval. In the Federal Reserve’s 2026 report, 42% of applicants received the full amount of financing they sought, 36% received some or most, and 22% received none. The survey ran September 3 to November 14, 2025, drew from a convenience sample, and covers all applicants, not startups alone. Treat a promise of easy approval as a reason to check the lender through SBA’s Lender Match tool before you pay anything.
Startup business loans with no revenue, EIN only or no documents
SBA’s 7(a) loans page does not show an EIN-only option, a no-document option or a revenue minimum. It says you work with your lender, which determines the documents you need. The microloan program is written for businesses starting up, and it still runs through an SBA-approved intermediary that makes all credit decisions and sets all terms.
Offers that skip documents need a close look. The FTC’s January 2022 release on RAM Capital Funding describes allegations that the defendants required personal guarantees and upfront fees after saying they would not, provided less funding than promised, and debited more than they said. The FTC says the defendants were banned from the industry and ordered to pay $675,000.
Can an LLC get a startup loan?
An LLC can apply in at least some programs. IBank, California’s state finance center, lists a limited liability company among eligible business entities in its Small Business Loan Guarantee program. The program also lists sole proprietors, cooperatives, corporations, partnerships, S-corporations and not-for-profits. IBank says it will not accept an individual as the borrower, and eligible uses include start-up costs. Credit qualifications are based on lender criteria.
SBA’s 7(a) loans page sets out eligibility rules but does not list business entity types. Ask your lender whether an LLC is eligible under the SBA program you are considering.
Who qualifies for a startup business loan?
Qualification depends on the program and the lender. SBA lists these requirements for 7(a) loans:
- Be an operating business
- Operate for profit
- Be located in the U.S.
- Be small under SBA size requirements
- Not be a type of ineligible business
- Not be able to obtain the desired credit on reasonable terms from non-federal, non-state and non-local government sources
- Be creditworthy and demonstrate a reasonable ability to repay
The microloan list uses the operating, for-profit, U.S. and size tests but leaves out the creditworthiness test, and intermediary lenders make all credit decisions. The 7(a) Working Capital Pilot page lists “Has at least one-year of operating history” among its points for who can benefit, so a brand-new company may not fit that pilot yet. IBank’s California program lists eligible applicants as small businesses with 1 to 750 employees.
What is a merchant cash advance, and is it a loan?
A merchant cash advance (MCA) is often offered to small businesses that have trouble getting bank loans. The FTC describes MCA companies as providing funds in exchange for a percentage of the business’s revenue, with daily withdrawals from the bank account until the obligation is met. Texas legislators’ analysis of H.B. 700 says MCAs are often “structured as ‘sales-based financing’” and are currently not disclosed as loans. Whether an MCA is a loan is a legal question that courts and regulators have taken up. New York’s attorney general sued Yellowstone Capital, describing its products as “illegal high-interest loans disguised as merchant cash advances.” Under the settlement, all merchant debts to Yellowstone, totaling $534 million, have been canceled.
The FTC’s January 2022 release also says some MCA providers engage in aggressive, and potentially misleading, marketing practices and use potentially abusive collection tactics. Ask for the total repayment in dollars, including every fee, in writing before you sign. For a side-by-side view of these structures, see revenue-based financing vs traditional business loans.
Law: Texas H.B. 700 (89th Legislature). The Senate Research Center’s Texas H.B. 700 bill analysis covers the engrossed bill, dated May 22, 2025. As of October 31, 2026, check the bill’s current status with the Texas Legislature. This is information, not legal advice.
Can I do this without a loan?
Yes. usa.gov lists personal funds and investors as ways to fund a startup. The Federal Reserve’s 2026 report says that among firms that did not seek financing, most said they did not apply because they already had sufficient funding. SBA’s 10-step guide explains how to plan, launch and manage a business, and SBA’s counseling and training is free or low cost. You can call SBA’s Answer Desk at 1-800-827-5722 or email answerdesk@sba.gov.
How do I spot a startup loan scam?
Scam offers tend to reuse the same claims. Check any offer against this table.
| Claim you may hear | What the government record says | Where to check |
|---|---|---|
| A federal grant to start your business | SBA does not provide grants for starting and expanding a business. usa.gov says there are no federal grants for starting a business. | SBA’s grants page |
| 0% interest through special relationships with lenders | The FTC alleged Seek Capital charged clients thousands of dollars to open credit cards, often without the promised 0% terms. | FTC release on Seek Capital |
| Pay a fee first to get funded | The FTC alleged RAM Capital Funding required upfront fees after saying it would not. | FTC release on RAM Capital Funding |
| A contract that lets the lender go straight to court | The FTC alleged that a confession of judgment let defendants obtain uncontested judgments. In February 2024, the court entered a $20.3 million judgment in the FTC case against merchant cash advance operator Jonathan Braun. | FTC release on the Braun judgment |
For a checklist on contract red flags, read small-business contract scams.
Before you apply
- Ask the lender for a written quote with the rate, whether it is fixed or variable, the term, every fee and the monthly payment.
- Ask for the total repayment in dollars, including fees, for any merchant cash advance.
- Ask whether a personal guarantee is required and what happens to repayment if the business closes.
- Check the lender through SBA’s Lender Match tool before you pay any fee.
- Check the current prime rate in the Federal Reserve’s H.15 release, since base rates change.
This page is general information, not personal financial advice.
By USPatriotNews.com Editorial Team
