SBA Loans, Explained — and Shopped For You
The SBA doesn't lend money. It guarantees loans that banks and lenders make — which unlocks longer terms, lower down payments, and approvals that wouldn't happen conventionally. The catch: every participating lender has its own credit box. We package your file once and place it with the lenders most likely to say yes.
How an SBA loan actually works
1. The government guarantees
The SBA backs a large share of the loan — typically 75–85% on 7(a) — so the lender's risk shrinks dramatically.
2. A lender approves & funds
Banks and SBA-approved lenders make the actual loan and decision. Each has its own appetite — which lender sees your file matters as much as the file itself.
3. You get bank-beating structure
Longer terms (up to 25 years on real estate), lower down payments, and uses conventional loans often won't touch — like partner buyouts and acquisitions.
The SBA programs, side by side
Program caps are set by the SBA; rates and final terms are set by the lender and vary by deal.
| Program | Max amount | Best for | Typical terms | Start here |
|---|---|---|---|---|
| SBA 7(a) | Up to $5 million (SBA cap) | Working capital, business acquisitions & partner buyouts, refinancing, equipment, owner-occupied real estate | Up to 10 yrs (working capital, equipment) · up to 25 yrs (real estate) | Business Capital → |
| Small-ticket 7(a) | About $50,000–$350,000 | Established businesses (roughly 3+ yrs, 680+ credit, $250K+ revenue) that want SBA terms in weeks, not months | Streamlined 7(a) — often 2–6 weeks to close | Business Capital → |
| SBA 504 | Up to $5.5 million (SBA portion) | Owner-occupied real estate & heavy equipment — long-term fixed structures, down payments often ~10% | 10, 20, or 25 years | Real Estate & Assets → |
What you'll typically need
Typical guidelines across SBA lenders — the SBA sets eligibility; each lender sets its own credit box.
Capco Capital is a commercial lending advisory firm operated by Capco Capital LLC. We arrange financing through third-party lenders as a loan broker and are compensated by the lender when a loan funds. We are not a lender and are not affiliated with the U.S. Small Business Administration. Guidelines vary by lender and program and are not a commitment to lend.
SBA questions, answered straight
How do SBA loans actually work?
The SBA doesn't lend the money — banks and approved lenders do. The SBA guarantees a large portion of the loan (typically 75–85% on 7(a)), which reduces the lender's risk and lets them approve businesses and terms they otherwise couldn't. You repay the lender like any loan; the guarantee only matters if things go wrong.
What's the difference between SBA 7(a) and SBA 504?
7(a) is the versatile program — working capital, acquisitions and partner buyouts, refinancing, equipment, up to $5 million. 504 is purpose-built for fixed assets — owner-occupied real estate and heavy equipment — up to $5.5 million through a bank + Certified Development Company structure, with long-term fixed rates and down payments often around 10%.
Can an SBA loan fund a partner buyout or business acquisition?
Yes — that's one of 7(a)'s core uses. The loan finances the purchase of a partner's ownership interest or an entire business, repaid from the business's cash flow. A business valuation is typically part of underwriting.
What do I need to qualify for an SBA loan?
A for-profit U.S. business of eligible size, reasonable owner credit (most lenders look for the mid-600s and up), cash flow that supports the payment, and owners of 20%+ typically provide a personal guarantee. Collateral helps but a shortfall alone doesn't disqualify a 7(a) deal.
How long does SBA funding take?
Honest answer: SBA is the slower, cheaper option. Streamlined small-ticket 7(a) loans can close in about two to six weeks; larger 7(a) loans commonly run 30–90 days; 504 usually takes 60–90+ days because of the two-part structure. If your timeline is shorter, a faster loan now and an SBA refinance later is sometimes the right plan — we'll lay out both.
Can an SBA loan pay off my merchant cash advance?
Sometimes, but don't count on it. SBA rules restrict refinancing merchant cash advances and similar short-term debt, and lenders apply those rules conservatively. If you're carrying advances, we'll tell you up front whether SBA is realistic — and if it isn't, what the real exit is (see our MCA payoff page).
Do you arrange SBA Express loans or SBA microloans?
Not today. We only list programs our lending partners actually offer. Small SBA requests go through streamlined 7(a) programs instead, and microloans are made by SBA-designated nonprofit intermediaries — we'll point you to one if that's the better fit.
Why work with a lending advisor instead of going straight to a bank?
Every SBA lender has its own credit box, industry appetite, and turn times — a bank can only offer you its own. As your lending advisors we research your business, package one file, and place it with the SBA lenders most likely to approve your specific deal, and if SBA isn't the best fit, the same file works for conventional options.
One file. Every participating lender that fits.
Two minutes to see your options — no credit impact, no obligation. Or call (337) 270-2036.
