# SBA microloans

**Short answer:** A microloan is a loan of up to $50,000 from an intermediary lender that SBA funds. Repayment can run up to 7 years. SBA says the average is about $13,000 (13 CFR § 120.707; sba.gov/loans/microloans, read November 8, 2026).

Canonical page: https://www.sbaexpress.loans/sba-programs/microloans/
Last checked: 2026-11-09

## Key facts

**SBA microloans: key facts**

| Fact | Value |
| --- | --- |
| Maximum loan | $50,000 |
| Maximum term | 7 years |
| Average loan, per SBA | about $13,000 |
| Who you apply to | An SBA-approved intermediary |
| Maximum rate | the intermediary's SBA loan rate plus 7.75 percentage points on loans over $10,000, or plus 8.5 percentage points on loans of $10,000 or less |
| Allowed uses | working capital and the purchase of materials, supplies, furniture, fixtures and equipment |
| Not allowed | Paying existing debts or buying real estate |

## On this page

- [What a microloan is](#what-a-microloan-is)
- [Who can borrow](#who-can-borrow)
- [How much you can borrow](#how-much-you-can-borrow)
- [What it can pay for](#what-it-can-pay-for)
- [Term and rate](#term-and-rate)
- [Who decides and how to apply](#who-decides-and-how-to-apply)
- [What this page cannot tell you](#what-this-page-cannot-tell-you)
- [When another program fits better](#when-another-program-fits-better)

## What a microloan is

A microloan is a short-term, fixed-rate loan from an intermediary lender (13 CFR § 120.701). SBA lends to intermediaries, and they lend to you (13 CFR § 120.700). SBA describes them as nonprofit community-based organizations with lending and technical assistance experience (sba.gov/loans/microloans, read November 8, 2026). They also give borrowers marketing, management and technical assistance (13 CFR § 120.701).

## Who can borrow

SBA says a business must (sba.gov/loans/microloans, read November 8, 2026):

- Be an operating business that operates for profit.
- Be located in the United States.
- Be small under SBA size requirements.
- Not be a type of ineligible business.

Microloans help small businesses start up and expand. Certain not-for-profit childcare centers can also use them (sba.gov/loans/microloans, read November 8, 2026; 13 CFR § 120.707(a)).

## How much you can borrow

The ceiling is $50,000, and no borrower may owe one intermediary more than that at any one time (13 CFR § 120.707(b)). The rule also sets two lower steps:

- Generally, an intermediary should not lend more than $10,000 to one borrower.
- Above $20,000, you must show you cannot get credit elsewhere at comparable rates and have good prospects for success.

SBA says the average microloan is about $13,000. It gives no date for that figure (sba.gov/loans/microloans, read November 8, 2026).

## What it can pay for

Proceeds can go to working capital and the purchase of materials, supplies, furniture, fixtures and equipment (13 CFR § 120.707(a)). SBA's page also names inventory and machinery. You cannot use a microloan to pay existing debts or buy real estate (sba.gov/loans/microloans, read November 8, 2026).

## Term and rate

Each microloan must be repaid within 7 years (13 CFR § 120.707(b)). The intermediary sets your actual term, based on the amount, the use, its requirements and your needs (sba.gov/loans/microloans, read November 8, 2026). The sba.gov/sba-lenders page says 6 years, in its comparison table and in its microloan terms. The regulation and SBA's microloan page both say 7 years.

13 CFR § 120.707(c) caps the rate at:

- the intermediary's SBA loan rate plus 7.75 percentage points on loans over $10,000, or plus 8.5 percentage points on loans of $10,000 or less.

SBA charges an intermediary a rate tied to the five-year Treasury, so the cap moves over time (13 CFR § 120.706(c)). We do not print a current figure for that reason. Actual rates vary by intermediary (sba.gov/loans/microloans, read November 8, 2026), so ask for yours in writing.

## Who decides and how to apply

You apply to an SBA-approved intermediary in your area, not to SBA. The intermediary makes all credit decisions and sets all terms (sba.gov/loans/microloans, read November 8, 2026). SBA does not review microloans for creditworthiness (13 CFR § 120.707(a)).

SBA's site lists microlenders. An intermediary generally may not operate in more than one state (13 CFR § 120.702(b)).

## What this page cannot tell you

Collateral, credit standards and fees vary by intermediary. We found no SBA collateral rule or minimum credit score for microloan borrowers in 13 CFR Part 120, Subpart G. Ask each intermediary what it requires.

## When another program fits better

- **You need to pay off debt or buy real estate.** A microloan cannot do either. Look at a [7(a) loan](https://www.sbaexpress.loans/sba-programs/7a-loans/) or a [504 loan](https://www.sbaexpress.loans/sba-programs/504-loans/).
- **You need more than $50,000.** Look at [SBA Express](https://www.sbaexpress.loans/sba-programs/sba-express/).
- **A declared disaster hit your business.** [SBA disaster loans](https://www.sbaexpress.loans/sba-programs/disaster-loans/) come directly from SBA.

## Sources

- [13 CFR § 120.700](https://www.ecfr.gov/current/title-13/section-120.700)
- [13 CFR § 120.701](https://www.ecfr.gov/current/title-13/section-120.701)
- [13 CFR § 120.702](https://www.ecfr.gov/current/title-13/section-120.702)
- [13 CFR § 120.706](https://www.ecfr.gov/current/title-13/section-120.706)
- [13 CFR § 120.707](https://www.ecfr.gov/current/title-13/section-120.707)
- [sba.gov/loans/microloans (read November 8, 2026)](https://www.sba.gov/loans/microloans/)
- [sba.gov/sba-lenders (read November 8, 2026)](https://www.sba.gov/sba-lenders)