An SBA microloan is a loan of up to $50,000 for a small business, and you get it from a nonprofit intermediary lender rather than directly from the SBA. The SBA provides funds to those intermediaries, and they make the credit decisions and set the terms. To get one, you work with an SBA-approved intermediary in your area.
How do SBA microloans work?
The microloan program runs through intermediaries. The SBA microloan page describes them as nonprofit community-based organizations with experience in lending, plus management and technical assistance. For application and account-specific questions, contact the SBA-approved intermediary that handles your microloan.
The program is also a funding channel for those intermediaries. A 2024 Federal Register rule changed the microloan regulations to reflect the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. That change increased the total amount an intermediary may borrow under the program per year and in aggregate.
How much are SBA microloans?
SBA microloans go up to $50,000, and the SBA says the average microloan is about $13,000. As of October 28, 2026, the SBA microloan page lists the terms below.
| Term | What the SBA microloan page says |
|---|---|
| Maximum amount | Up to $50,000 |
| Average amount | About $13,000 |
| Interest rate (as of October 28, 2026) | Varies by intermediary; generally between 8% and 13% |
| Maximum repayment term | Seven years |
| Repayment terms | Depends on the loan amount, planned use, lender requirements, and the needs of the business owner |
Ask your intermediary whether your rate is fixed or variable and which base rate it uses. For SBA 7(a) loans, the 7(a) loans page notes that the payment can change on a variable rate loan when the interest rate changes. For context on the rate environment, the Federal Reserve’s October 28, 2026 policy statement kept its target range for the federal funds rate at 3-3/4 to 4 percent.
The microloan page does not show fees, so ask for every fee in writing before you sign.
What can you use an SBA microloan for?
Microloans can pay for working capital, inventory, supplies, furniture, fixtures, machinery and equipment. The SBA says to use them when you need less than $50,000 to start or grow your business.
They cannot pay existing debts or buy real estate. If you want to refinance old business debt or buy a building, a microloan is not the right tool.
Who qualifies for an SBA microloan?
The SBA page lists these requirements. Your business must:
- Not be a type of ineligible business
- Be an operating business
- Operate for profit
- Be located in the U.S.
- Be small under SBA size requirements
Certain not-for-profit childcare centers are also covered. A 2024 Federal Register final rule implemented regulatory changes concerning criminal-background reviews for applicants to the microloan program and other SBA business loan programs.
Can a startup get an SBA microloan?
The program is built to help businesses start up. The SBA page says microloans help small businesses and certain not-for-profit childcare centers start up and expand. The same page lists “be an operating business” as a requirement, so ask your intermediary how it treats a business that has not opened yet.
Do SBA microloans work for bad credit?
Intermediaries make their own credit decisions, so ask about credit requirements on your first call. For comparison, the 7(a) loans page lists being creditworthy and able to repay as an eligibility requirement for that program.
Do SBA microloans require collateral?
Ask the intermediary before you apply, and get the answer in writing with the loan terms.
How long does an SBA microloan take?
The microloan page does not show a timeline. On your first call, ask the intermediary for its process, its typical timing, and the paperwork it needs.
How do you apply for an SBA microloan?
You apply through an SBA-approved intermediary. These are the steps:
- Find an intermediary near you with the Find a microlender tool on the SBA microloan page.
- Ask for the interest rate, every fee, the repayment term, the collateral rules, the credit requirements and the timeline, and get them in writing.
- Submit your application to the intermediary. It makes the credit decision and sets your terms.
- After funding, contact your microlender directly for your balance, due dates or other account questions.
Does Chase offer SBA microloans?
The microloan page does not name Chase. Microloans come through SBA-approved intermediaries, so ask Chase directly whether it is one. If it is not, use the microlender finder to locate one near you.
SBA microloan vs. 7(a) loan vs. SBA grants
The 7(a) program is SBA’s primary business loan program. Its maximum loan amount is $5 million, compared with up to $50,000 for a microloan. Grants are a different kind of help altogether.
| Feature | SBA microloan | SBA 7(a) loan | SBA grants |
|---|---|---|---|
| Maximum amount | Up to $50,000 | Up to $5 million | Not a loan. SBA does not provide grants for starting and expanding a business. |
| Who you apply through | SBA-approved nonprofit intermediary | A local lender. SBA does not lend directly. | SBA says it provides grants to nonprofits, Resource Partners and educational organizations. |
| Typical uses | Working capital, inventory, supplies, furniture, fixtures, machinery, equipment. Not existing debts or real estate. | Real estate, short- and long-term working capital, refinancing business debt, machinery and equipment, furniture, fixtures and supplies, changes of ownership | Counseling, training and research programs for eligible organizations |
| Repayment | Up to seven years | Most 7(a) term loans are repaid with monthly payments of principal and interest from the business’s cash flow. | Not a loan |
For 7(a) eligibility and how to apply with a local lender, read the SBA 7(a) loans page. For grant programs, read the SBA grants page. Businesses considering other funding options can also review equipment financing for startups. Business owners may also want to understand the homestead exemption when considering property-tax savings.
How do you avoid scams and fee-charging brokers?
The SBA says it only communicates from email addresses ending in @sba.gov. If someone claiming to be from SBA contacts you from another address, the SBA says you should suspect fraud and report it.
The FTC announced in November 2025 that Seek Capital and its CEO were permanently banned from providing business financing, debt relief and credit repair services to settle FTC allegations. In its action against Seek Capital, the FTC said the company charged clients thousands of dollars to open credit cards, often without the 0% interest it had promised. The FTC also said the company advertised no upfront fees despite levying hefty charges when consumers tried to cancel.
What about a merchant cash advance?
The FTC describes merchant cash advances as funding provided in exchange for a percentage of a business’s revenue. The FTC describes merchant cash advance companies as providing funds to businesses in exchange for a percentage of the business’s revenue. In its 2022 press release, the FTC says the provider typically makes daily withdrawals from the business’s bank account until the obligation is met. Read the contract for how payments are taken before you agree to anything.
Frequently asked questions
Are SBA microloans easy to get?
The SBA does not say how easy microloans are to get. For context, the 2025 Small Business Credit Survey report from the Federal Reserve Banks found that 42% of applicants received the full amount of financing they sought, 36% received some or most, and 22% received none. That covers all financing applicants, not microloan applicants, and the survey is a convenience sample, not a random one.
Is an SBA microloan the same as an SBA grant?
No. A microloan is a loan you repay through your intermediary. The SBA says it does not provide grants for starting and expanding a business.
Before you apply
- Whether your rate is fixed or variable, and what base rate it uses
- Every fee, in writing
- The repayment term and the payment amount
- Whether collateral is required
- The credit requirements
- The timeline from application to funding
- Whether a business that has not opened yet qualifies
By USPatriotNews.com Editorial Team
