Small business loan amounts range from $5,000 to $5 million, depending on the lender and the type of loan

There is no single answer to how much a small business loan costs because the amount you can borrow depends on what you need the money for, how much revenue your business generates, and which lender you work with. An SBA loan through a bank might let you borrow $350,000 for equipment, while a different lender might offer $50,000 for working capital. The interest rate you pay — which is what actually determines your cost — typically ranges from 6% to 13% for SBA loans, but can be higher or lower depending on the current market, your credit score, and how long you take to repay.

The real cost of a loan is not just the interest rate. You also pay origination fees (usually 1% to 3% of the loan amount), which the lender deducts upfront or adds to what you owe. SBA loans also carry a may provide fee, which is a percentage the lender pays to the Small Business Administration for backing the loan. That fee gets passed to you as part of your total cost.

Key Takeaways

  • SBA loans typically range from $5,000 to $5 million, with the most common size between $50,000 and $350,000 for small business owners.
  • Interest rates on SBA loans usually fall between 6% and 13%, but your actual rate depends on your credit, the lender, and current market conditions.
  • You will pay origination fees (1% to 3% of the loan amount) and an SBA may provide fee on top of interest, which together can add 2% to 5% to your total cost.
  • The amount you can borrow is limited by how much revenue your business makes, how much collateral you can offer, and what the lender is willing to risk on your business.

How loan size connects to what you need the money for

SBA loans come in different programs, and each has its own borrowing limits. A 7(a) loan, which is the most common type, lets you borrow up to $5 million. A microloan through the SBA tops out at $50,000. If you need money for equipment, an SBA Express loan caps out at $350,000. If you are buying real estate or a building, you can borrow more because the property itself serves as collateral.

What matters more than the theoretical maximum is what a lender will actually give you. Most banks will not hand you $5 million if your business made $200,000 in revenue last year. Lenders typically want to see that your business can generate enough profit to repay the loan within the term you choose — usually five to ten years for working capital, or up to 25 years for real estate. If your business is new or your revenue is uneven, lenders become more cautious and may offer smaller amounts or ask for personal collateral.

Interest rates and what moves them

The interest rate you receive is not set by the SBA — it is negotiated between you and the bank. The SBA sets a maximum rate that lenders can charge, which is usually the prime rate plus 2.25% to 2.75%, depending on the loan program. Right now, that maximum is somewhere between 10% and 13%, but that number changes as the Federal Reserve raises or lowers the prime rate.

Your actual rate within that range depends on your personal credit score, your business credit history, how much you are borrowing, and how long you want to take to repay. A business owner with a 750 credit score and three years of solid revenue might get 6.5%. Someone with a 650 score or a newer business might pay 10% or 11%. The difference between 6.5% and 10% on a $100,000 loan over five years is roughly $2,000 to $3,000 in extra interest.

Fees that add to your actual cost

Interest is only part of what you pay. Most lenders charge an origination fee when you take out the loan, typically 1% to 3% of the amount you borrow. On a $100,000 loan, that is $1,000 to $3,000 taken out of the money you receive or added to what you owe.

SBA loans also carry a may provide fee, which is what the SBA charges the lender for insuring the loan. The lender passes this cost to you. For a 7(a) loan, the may provide fee is usually between 2% and 3.75% of the loan amount, depending on the size and term. On a $100,000 loan, that is $2,000 to $3,750. Some lenders roll this into your interest rate; others charge it separately. Either way, you pay it.

You might also encounter prepayment penalties if you pay off the loan early, though many SBA loans do not have them. Always ask whether you can pay off the loan without penalty — if you can, you have the option to refinance if rates drop.

How much you can actually borrow based on your business

The amount a lender will give you comes down to three things: your revenue, your collateral, and your credit. A business that has been operating for three years with $500,000 in annual revenue and a 700 credit score will get a larger loan than a one-year-old business with $100,000 in revenue and a 650 score, even if both are in the same industry.

Lenders typically want to see that your business can generate enough cash flow to cover the monthly loan payment plus your other expenses. If your business nets $50,000 a year after expenses, a lender might approve a loan with a monthly payment of $1,500 to $2,000, which works out to roughly $90,000 to $120,000 depending on the term. If you are asking for $300,000, they will likely decline or ask you to bring in a co-signer or personal collateral.

Collateral also matters. If you are buying equipment, the equipment itself becomes collateral. If you are borrowing for working capital, the lender might ask for a lien on your business assets, your personal home, or a personal may provide that you will repay the loan even if the business fails. The more collateral you can offer, the more you can borrow and the lower your rate might be.

Comparing SBA loans to other borrowing options

SBA loans are not the only way to borrow for a business. A traditional bank loan might have a higher interest rate but lower fees. A line of credit from your bank might have a lower rate but a shorter repayment period. An equipment loan from a specialty lender might be faster to close but only work if you are buying specific assets. A merchant cash advance is quick but very expensive — rates can reach 40% or higher.

The reason many business owners choose SBA loans is that the rates are capped and the terms are long, which keeps monthly payments manageable. A $100,000 SBA loan at 8% over five years costs about $1,850 per month. A merchant cash advance for the same amount might cost $2,500 to $3,500 per month because the rate is so much higher. Over the life of the loan, the SBA option saves you thousands.

How to estimate what your loan will cost

To get a rough idea of your monthly payment, you need three numbers: the amount you want to borrow, the interest rate you expect to pay, and how many years you want to take to repay. A $100,000 loan at 8% over five years costs roughly $1,850 per month. The same loan over ten years costs roughly $1,210 per month. Over three years, it costs roughly $3,100 per month.

Add the origination fee and may provide fee to the total amount you owe. If you borrow $100,000 and pay 2% in origination fees and 3% in may provide fees, you actually owe $105,000. That $5,000 gets rolled into your monthly payment or deducted from the money you receive.

Most banks have a loan calculator on their website where you can plug in numbers and see what a payment would look like. The SBA also publishes the current maximum interest rates by loan program on its website, which gives you a ceiling to work with. Use these tools to compare what different lenders are offering before you commit.

Frequently Asked Questions

Can I borrow less than $5,000 from the SBA?

The standard 7(a) loan has a $5,000 minimum, but SBA microloans start at $500 and go up to $50,000. Microloans are designed for newer or smaller businesses and are made through nonprofit lenders, not banks. The interest rate and fees are similar to a regular SBA loan, but the process is often faster.

What happens if I pay off my SBA loan early?

Most SBA loans do not have prepayment penalties, so you can pay them off without extra cost. This is useful if your business becomes more profitable and you want to reduce debt faster, or if interest rates drop and you want to refinance. Always confirm with your lender that there is no penalty before you sign.

Do I have to put money down to get an SBA loan?

The SBA does not require a specific down payment, but most lenders want to see that you have some skin in the game. Many banks ask for 10% to 20% of the project cost as a down payment. If you are buying equipment for $50,000, the lender might want you to contribute $5,000 to $10,000 and finance the rest.

How long does it take to get the money after I am approved?

SBA loans typically close in four to eight weeks from the time you submit your application. Some lenders are faster; others take longer depending on how busy they are and how complete your paperwork is. Once the loan closes, you usually receive the money within a few business days.

Can my interest rate change after I get the loan?

SBA loans are fixed-rate loans, which means your interest rate stays the same for the entire term. This is different from a line of credit or some other business loans, where the rate can move up or down. A fixed rate protects you if interest rates rise in the future.