The SBA microloan program is the one most often overlooked by owners who need a modest amount and assume the SBA is only for large deals. It is also structurally different from the other two programs: the money comes from community nonprofits. This guide is educational only.
How the program is delivered
SBA "provides funds to specially designated intermediary lenders, which are nonprofit community-based organizations." Those intermediaries make and service the loans and bring their own experience with local and early-stage businesses. You approach the intermediary, not a bank and not the SBA.
How much you can borrow
SBA makes "loans up to $50,000," and states that the average microloan is about $13,000.
That average is the more useful number of the two. It tells you what the program is really for: a specific, bounded need — a piece of equipment, a stock order, a season's working capital — rather than a general-purpose facility.
What the money can be used for
Microloans can fund:
- Working capital
- Inventory and supplies
- Furniture and fixtures
- Machinery and equipment
What the money cannot be used for
SBA is explicit: "Proceeds from an SBA microloan cannot be used to pay existing debts or to purchase real estate."
Both exclusions matter. If the goal is to consolidate or refinance business debt, this is the wrong program — 7(a) lists debt refinancing among its uses. If the goal is property, that is 504 territory.
Term and cost
- The maximum repayment term allowed for an SBA microloan is seven years.
- Interest rates vary depending on the intermediary lender, and are "generally, between 8%-13%."
Treat that range as the program's own general description rather than a quote. The intermediary sets your rate, and rates move over time — ask the intermediary what it is offering today, and ask for the total cost over the full term, not only the monthly payment. Our loan payment calculator shows how a rate and term combine into a total, using assumptions it states on the page.
Who the program tends to suit
Because intermediaries are community-based and mission-oriented, they are often willing to work with businesses that are newer or smaller than a bank's usual profile, and they frequently pair lending with business support. If you have been turned down for a conventional loan on size or time-in-business grounds, this is a reasonable next call.
Compare your options
Browse finance companies and compare advertised offers, then confirm rates, fees, and terms with the company before you apply.
Frequently asked questions
What is the maximum SBA microloan?
SBA makes microloans of up to $50,000. The average microloan is about $13,000, which better reflects what the program is typically used for.
Can I use a microloan to pay off other business debt?
No. SBA states microloan proceeds cannot be used to pay existing debts or to purchase real estate. Debt refinancing is listed among the uses of the 7(a) program instead.
How long do I have to repay a microloan?
The maximum repayment term allowed is seven years. The actual term is set by the intermediary lender within that limit.
Who actually lends the money?
Nonprofit community-based organizations designated by SBA as intermediary lenders. They make the credit decision, set the rate within the program's parameters, and service the loan.
Disclaimer: GoFunding.Shop is an advertising marketplace, not a lender, bank, broker, credit-repair company, or financial advisor. We do not approve applications, set rates, or guarantee funding. Always confirm the full terms — APR, fees, and repayment schedule — directly with the advertising company before you apply.