How does the SBA Microloan program work?
Short answer
SBA lends to nonprofit community intermediaries, and they lend up to $50,000 to small businesses. The intermediary makes the credit decision and sets the terms. SBA does not review microloans for creditworthiness (13 CFR § 120.707(a)).
SBA does not make microloans to you directly. It lends to organizations called Intermediaries, and they make the loans (13 CFR § 120.700).
Who the intermediaries are
An Intermediary can be one of four things (13 CFR § 120.701):
- A private nonprofit community development corporation or similar entity.
- A consortium of those nonprofits.
- A quasi-governmental economic development entity.
- An agency or nonprofit of a Native American tribal government.
It must make and service microloans and give borrowers marketing, management and technical assistance.
Loan features
- Amount: up to $50,000. SBA says the average is about $13,000 (sba.gov/loans/microloans, read November 8, 2026).
- Term: up to 7 years.
- Rate: fixed and capped by rule (13 CFR §§ 120.701, 120.707).
- Uses: working capital and the purchase of materials, supplies, furniture, fixtures and equipment.
Who decides
SBA-approved lenders make all credit decisions and set all terms, SBA says. SBA does not review microloans for creditworthiness (13 CFR § 120.707(a)).
How intermediaries are funded
SBA lends money to the Intermediary, which adds 15% from non-federal sources (13 CFR § 120.708). Those funds and borrower repayments go into a Microloan Revolving Fund (13 CFR § 120.709). SBA grants can pay for technical assistance (13 CFR § 120.712).
How this differs from 7(a)
In a 7(a) loan, a lender makes the loan and SBA guarantees part of it. In a microloan, the Intermediary is your lender. SBA's relationship is with the Intermediary, not with you.
Ask lending partners about your loan
Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
Janover Capital LLC is not a lender and is not the SBA. The lender makes the credit decision. A lender or marketplace may pay us a referral fee if we connect you, at no cost to you. Advertiser disclosure.