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An SBA lender is a lender that has been approved to offer government-backed SBA (Small Business Administration) loans. These lenders help businesses get the funds they need to use as working capital, meet payroll, purchase inventory, and expand their business in addition to other uses. SBA loans offer low rates and long terms because they’re designed to help the business thrive and grow.
We researched more than a dozen SBA lenders and chose the top six based on reputation, loan offerings, repayment terms, and borrower qualifications. Keep reading to find out which SBA lender fits the needs of your small business.
Best Overall : Live Oak Bank
Why We Chose it: As the largest SBA lender, Live Oak Bank offers a variety of different loans nationwide with competitive rates and an experienced team of lending professionals.
Top SBA 7(a) lender by dollar amount in 2020
Online resource center
Transparent lending process
Minimum loan amount is usually $25,000
No branches; only online and over the phone
Live Oak Bank was founded in 2008 and is headquartered in Wilmington, NC. It was started to help veterinary practices find funding and still has strong ties to the veterinary and agriculture industries. It has a solid reputation and serves customers in all 50 states. In addition to SBA loans, the bank offers online banking services, USDA loans, and commercial loans.
Live Oak Bank is the country’s leading SBA and USDA lender by dollar volume for 2020 and has loaned more than $1.5 billion. It serves hundreds of industries and even has specific industry-focused teams for dental, healthcare, craft brewing, solar, trucking, and more.
Live Oak Bank is the number one lender of the most popular type of SBA loan, the 7(a). It requires your business to be established for at least three years and a personal minimum credit score of 680. In addition, the loan term is up to 25 years and the maximum loan amount is $25 million. SBA loan rates are competitive but to get exact rates and terms you do need to speak to a representative.
Banking services are available online and you can fill out a short form online to contact a lender to discuss your SBA loan needs. Because Live Oak Bank is a preferred SBA lender, your application and funding process will be faster than non-preferred lenders.
Best for Multiple SBA Loan Options : Wells Fargo
Why We Chose it: Wells Fargo offers multiple SBA loans with varying loan amounts, terms, and qualifications.
SBA Preferred Lender
Online services and in-person branches
Well-known lender with a solid reputation
May not have the personal attention of a small lender
Some complaints about customer service
Wells Fargo was founded in 1852 and has a lengthy history of providing banking, retirement, wealth management, lending, and investing services both online and in its many branch locations. It has headquarters in San Francisco and operational headquarters in New York City. The bank is an SBA Preferred Lender specializing in 7(a) and 504 loans as well as commercial loans, so you may be able to combine several loans to meet your business needs. Wells Fargo offers lower down payments and longer repayment terms to make loans more affordable to small businesses.
The loan choice you apply for depends on your needs. The 7(a) loan is ideal if you want to buy an existing business, expand to an additional location, buy out a partner, purchase equipment and purchase real estate, or a combination of those things. Loan amounts go up to $5 million and terms are up to 25 years for real estate purchases and 10 years for non-real estate purchases.
A 504 loan is for businesses that want to expand by purchasing land, buildings, or additional equipment. Rates can be fixed or variable and terms are 25 years for land or real estate purchase and 10 years without. The Wells Fargo portion of the loan goes up to $6.5 million and the portion funded by a Certified Development Company goes up to $5 million. To get more information on exactly what documentation is required, you need to speak to a Wells Fargo SBA loan expert.
You can apply online, over the phone, or in-person with an SBA loan expert.
Best for Microloans : United Midwest Savings Bank
Why We Chose It: United Midwest Savings Bank offers SBA loans nationwide and specializes in loans up to $150,000.
Easy online application
Program focuses on microloans
Branches are only in Ohio
No SBA loans over $150,000
United Midwest Savings Bank is ranked in the top 25 of nationwide SBA lenders. As of 2020, it is the eighth largest SBA lender for number of loans and the twelfth largest in terms of dollar volume. The company focuses on being a partner for small businesses and has carved out a microloan niche.
It has a dedicated team that serves customers who need business loans up to $150,000, making it ideal if you want a smaller loan and an easier loan process. In addition to SBA loans, it offers full online banking services, residential loans, deposit services, and financial services.
The company lends to a variety of industries and an SBA loan specialist will work with you and advise you on the loan rates, any fees, the term, and what documents you need. Although the company doesn’t offer SBA loans over $150,000, you can combine an SBA loan with a USDA loan for a higher loan amount as long as you qualify.
You can apply online and usually receive a quick initial credit decision the same day. Funding can be completed in as little as 10 days.
United Midwest Savings Bank has a solid industry reputation and has been around since 1889.
Best for Real Estate Financing : Byline Bank
Why We Chose it: An SBA Preferred Lender, Byline Bank specializes in loans that can be used to finance real estate purchases in 40 states.
Multiple loans and an SBA credit line to choose from
Maximum loan amounts up to $10 million
Lengthy history of offering real estate loans
No online application
Branches only in a couple of states
Doesn’t lend in all 50 states
Byline Bank can trace its roots back over 100 years. In 1978, Metropolitan Bank Group bought North Community Bank, which was founded in 1914. It changed its name in 2015. Its headquarters are in Chicago and most of its branches are in that vicinity as well. This community bank and offers personal, business, and commercial banking services as well as wealth management services.
Byline Bank specializes in helping businesses apply for and receive SBA loans to use to purchase real estate. Loans are offered in 40 states and it's one of the SBA’s most active lenders. It also offers USDA business loans which can be used in conjunction with SBA loans. In addition to SBA loans, Byline Bank offers SBA lines of credit through the CapLines program.
Loans can go up to $10 million and you work with a dedicated SBA loan specialist to turn in your documents and get advice throughout the loan process. The loan specialists have years of experience working with loans for real estate which can be more complex, so if your company wants to purchase real estate, this can be helpful.
The website offers SBA loan customer testimonials, but you do need to speak with a loan specialist for loan rates and terms and exact documentation needed.
Best for Quick Funding : Funding Circle
Why We Chose It: Funding Circle offers the SBA 7(a) loan which funds as fast as 14 days after completing the application package.
One application for multiple loans
Helpful business resources on the site
Maximum loan amount $500,000
Not available to Nevada businesses
Funding Circle was founded in 2010 as a peer-to-peer lending marketplace where investors’ funds are lent out to fund multiple small businesses and each month, the investor is paid back a portion of their initial investment plus interest. Funding Circle also offers merchant cash advances, business term loans, and SBA 7(a) loans in a variety of different industries.
SBA 7(a) loans range from $25,000 to $250,000 and have interest rates of 6% (as of March 2022), no prepayment penalties, and terms of 10 years. You can start your application online and applying won’t affect your credit score.
After you fill out your online application, you will be matched with a loan specialist who will assist you with the process including preparing the full SBA loan application and providing all the necessary documentation. Loans fund as quickly as 14 days after the SBA loan application package is filled out which is ideal if you need the funds quickly.
Best Repayment Terms : Newtek Small Business Finance
Why We Chose it: Newtek Small Business Finance is a reputable company with decades of industry experience and it offers flexible repayment terms of up to 25 years.
Loans up to $15 million
Easy to contact a loan specialist
Long repayment terms
Need to talk to loan specialist for loan details
So many services on the website it may feel overwhelming
Newtek was founded in 1998 and began being publicly traded in 2000. In 2014, it converted to a business development company and is a non-bank and non-depository entity. Newtek has over 100,000 business accounts and multiple ways to get in touch with a loan specialist including over the phone, online chat, email, and requesting a callback. It offers business loans, lines of credit, business insurance, HR services, payroll processing, web design, and more. It can be a one-stop-shop for businesses that want to get a loan and other products and services in the same place.
Newtek offers SBA loans to businesses in a variety of industries that have been operating for at least two years. The maximum loan amount is $15 million and it can be used for multiple business purposes including working capital, business equipment, inventory, and more. The loan term is up to 25 years, making it an attractive option for businesses looking for a long repayment period and those who don’t want to have to worry about paying off the loan in a few years.
You can prequalify for a loan on the website, after which you’ll complete the application and get all the loan details from a loan specialist.
All of the SBA lenders that made our list are reputable and offer some types of SBA loans in multiple states. Their application process, funding time, and additional products and services may vary. Some lenders specialize in loans up to $150,000 and others offer loans in the millions. Some lenders offer an online application and others have the option of going into a branch.
Overall, we recommend checking out Live Oak Bank because they’re the nation’s largest SBA lender, have years of experience, and offer multiple loan programs in all 50 states.
|Best SBA Lenders|
|Loan Company||Why We Chose it||Standout Feature|
|Live Oak Bank||Leading SBA lender nationwide||Online resource center|
|Wells Fargo||Multiple types of loans||Option of phone, website, or in-branch applications|
|United Midwest Savings Bank||Simplified application process caters to smaller loans||Funded as quickly as 10 days|
|Byline Bank||Specializes in loans to finance real estate||Number two SBA lender in the country|
|Funding Circle||Quickly funded loans and online application||One loan application for multiple loan products|
|Newtek Small Business Finance||Long repayment terms up to 25 years||Many ways to contact a loan specialist|
What Is a Preferred SBA Lender?
An SBA Preferred Lender is a lending institution that has the authority to make final decisions on approving SBA loans. This speeds up the approval and funding process because non-preferred lenders have to submit each loan application directly to the SBA for approval. It’s important to note that the SBA doesn’t actually lend the money but instead, backs up a portion of the loan in case the borrower defaults.
If possible, it’s a good idea to choose a preferred lender because not only will the process be quicker, but they are also more familiar with SBA loans and may be able to answer questions in greater detail and give you more assistance on the application.
What Credit Score Is Needed for an SBA Loan?
The SBA doesn’t set a minimum credit score, however, the lender that you get the loan through will most likely have their own minimum credit score requirements. These vary by lender with some lenders looking at overall financials and others requiring a credit score as high as 680. You should also verify with the lender if the loan is based on your individual or business credit score, as this could make a difference.
Keep in mind that your individual credit score is different from your business credit score. To ensure that your personal and business scores are kept separate, you’ll need to get an EIN, a separate business bank account, and obtain lines of credit in your business’s name. And for your business to have a credit score, it will first need a business credit report.
Can a Startup Get an SBA Loan?
The SBA doesn’t offer funding that is specifically for startups, so you will have to see if one of their loan products fits your business. A startup may qualify for an SBA loan but it’s not a guarantee. Oftentimes, the lender will want to see that you have made attempts to find funding for the startup before applying for the loan or it may need to meet certain loan criteria such as using the money to purchase business equipment or real estate.
What Businesses Are Not Eligible for SBA Loans?
The following are some of the businesses not eligible for SBA loans:
- Those engaged in illegal activities
- Loan packaging
- Real estate investment firms
- Insurance companies but not independent agents
- Pyramid sales
- If the business owner is on parole
If you’re not sure if your business is eligible, contact the lender or the SBA directly to find out.
How Long Does It Take to Get an SBA Loan?
The time it takes to get an SBA loan depends on a variety of factors including the type of loan, the industry, location, and if all the documents are turned in with the loan application. In addition, it takes longer if the lender isn’t SBA preferred. Typically, expect it to take anywhere from one month to six months from the time you apply to the time you get funded.
After thoroughly researching more than a dozen SBA lenders, we narrowed it down to the top six. We chose a combination of online lenders and banks and compared them based on the type of loans offered, additional services, rates, terms, and qualifications. We also considered the application process and overall customer reviews.
All of our top choices are reputable companies with lengthy lending experience that provide competitive loans.