SBA loan type

SBA microloans

Short answer. An SBA microloan is up to $50,000 (the average is around $13,000–$15,000), made not by the SBA or a bank but through nonprofit community intermediary lenders. It funds working capital, inventory, supplies and equipment — not real estate or refinancing — on terms up to 7 years, typically at 8–13%, and it often comes with free business training. It is built for startups and very small or underserved businesses that a 7(a) lender might pass on.

Who actually makes the loan

This is the key difference from the rest of the SBA world: microloans are delivered by nonprofit, community-based intermediary lenders — mission lenders and CDFIs the SBA funds and oversees — not by the banks in our lender database and not directly by the SBA. The intermediary sets its own rate, terms and credit standards within SBA limits, and you apply to them.

What it can and cannot fund

Microloan proceeds can go to working capital, inventory and supplies, furniture and fixtures, and machinery or equipment. They cannot be used to buy real estate or to pay off existing debt — if you need property, that is a 504 or 7(a) conversation, and to refinance debt, see the refinancing guide.

Terms, rate and training

The maximum loan is $50,000 and the maximum term is 7 years. Interest is set by the intermediary, generally in the 8–13% range — higher than a big 7(a), but these are small, higher-touch loans. Many intermediaries pair the loan with free or low-cost business training and technical assistance, which is often as valuable as the money for a first-time owner.

Who it fits

Microloans exist to reach borrowers the conventional market underserves: startups, very small businesses, and women-, veteran-, minority- and low-income-owned firms that may not clear a bank’s 7(a) box. If you need a modest amount to get going and value the coaching, a microloan can beat waiting to qualify for something bigger. See the startup guide.

How to find an intermediary

Because the lenders are local nonprofits rather than national banks, the SBA maintains a list of participating microloan intermediaries by state on sba.gov. Start there, or with your local SBA district office or Small Business Development Center. Our lender and CDC data does not cover microloan intermediaries — they are a separate channel — which is why this page points you to the source rather than a ranking.

Common questions

How much can you borrow with an SBA microloan?

Up to $50,000. The average microloan is around $13,000–$15,000.

Who gives out SBA microloans?

Nonprofit community-based intermediary lenders that the SBA funds and oversees — not banks and not the SBA directly.

What can an SBA microloan be used for?

Working capital, inventory, supplies, furniture and fixtures, and machinery or equipment. Not real estate and not to refinance existing debt.

Are SBA microloans forgivable?

No. Like other SBA business loans, a microloan must be repaid.

All SBA loan types → Guide: startup → Guide: working capital → Do you qualify? →

Rules current to SOP 50 10 8 and the SBA Microloan program guidelines; amounts and terms can change. This is education, not advice. Microloan intermediary lenders are listed on sba.gov by state.