How is a microloan different from a 7(a) or SBA Express loan?
Short answer
A microloan comes from a nonprofit intermediary, tops out at $50,000 and runs up to 7 years. A 7(a) or SBA Express loan comes from an SBA lender with a partial guaranty, and can reach $5,000,000 or $500,000.
A microloan is a small, fixed-rate loan from a nonprofit intermediary. A 7(a) or SBA Express loan is larger and comes from an SBA lender.
Side by side
- Lender. Microloan: an intermediary. 7(a) and SBA Express: banks and other SBA lenders.
- SBA's role. Microloan: SBA funds the intermediary. 7(a): SBA guarantees 85% on loans of $150,000 or less and 75% on larger loans. SBA Express: 50%.
- Maximum. Microloan: $50,000. 7(a): $5,000,000. SBA Express: $500,000.
- Credit decision. Microloan: the intermediary, with no SBA credit review. SBA Express: the lender makes the credit decision without prior SBA review.
- Rate. Microloan: fixed, with a cap tied to the intermediary's SBA rate. 7(a) and SBA Express: a variable-rate maximum of Prime plus 3.0 to 6.5 percentage points, depending on loan size.
- Uses. Microloan: working capital and the purchase of materials, supplies, furniture, fixtures and equipment, with no debt payoff or real estate. 7(a): those uses plus real estate, business purchases and eligible refinancing.
- Term. Microloan: up to 7 years. 7(a) working capital: up to 10 years.
Collateral
SBA's microloan rule (13 CFR § 120.707) sets no collateralProperty a lender can take and sell if a loan is not repaid. standard, so the intermediary decides. On SBA Express, collateral is not required at or below $50,000 (SOP 50 10 8.1, App. 19, Para. B.3).
Support
Intermediaries must provide marketing, management and technical assistance to borrowers (13 CFR § 120.701).
Sources
- 13 CFR § 120.701
- 13 CFR § 120.707
- sba.gov/loans/microloans (read November 8, 2026)
- sba.gov/sba-lenders (read November 8, 2026)
- SOP 50 10 8.1, Sec. B, Ch. 2 (p. 125)
- SOP 50 10 8.1, App. 16, Para. B.2 (Para. B begins p. 388)
- SOP 50 10 8.1, App. 17 (p. 390)
- SOP 50 10 8.1, App. 19, Para. B.3 (Para. B begins p. 408)
- 13 CFR § 120.214(d)
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