What is the maximum SBA line of credit? (2024)

What is the maximum SBA line of credit?

The SBA CAPLines program offers four different lines of credit that are designed to help small business owners with their short-term working capital needs. The maximum amount offered by SBA CAPLines is $5 million.

How much money can you get from an SBA loan? Funding maximums vary based on the type of SBA loan. SBA 7(a) loans are available in amounts up to $5 million. CDC/504 loans are available up to $5 million, but offer up to $5.5 million for select projects.

Loan amounts

Most 7(a) loans have a maximum loan amount of $5 million. However, 7(a) loans made under the SBA Express and Export Express delivery methods have maximum loan amounts of $500,000. SBA's maximum exposure (i.e., dollars guaranteed) is $3.75 million.

Get $500 to $5.5 million to fund your business

Some loan programs set restrictions on how you can use the funds, so check with an SBA-approved lender when requesting a loan. Your lender can match you with the right loan for your business needs.

For the SBA 7(a), this means a minimum credit score of approximately 640. But you'll increase your chances to be approved for an SBA loan with a minimum credit score of 680 or higher.

What Disqualifies You From Getting an SBA Loan? The three primary disqualifiers for an SBA loan include a poor credit history, insufficient collateral or equity investment, and lack of a solid business plan. These factors can signal to lenders a high risk of default, making loan approval less likely.

What is the easiest SBA loan to get approved for? Loans under the 7(a) program have a higher acceptance rate. And since most 7(a) loans are for $50,000 or less, it may be easier to get approved for a small amount with an Express loan.

Low credit scores are a common reason why it's difficult to get an SBA loan. Banks are risk-averse, and usually, require borrowers to have a FICO score above 650. They may consider both your personal credit score and your business credit score.

SBA's current regulations provide that a joint venture can be awarded no more than three contracts over a two-year period. While SBA plans to keep the two-year lifespan for joint venture awards, it plans to get rid of the three contract maximum.

Many statistics say that large banks approve SBA loans at rates as low as 20-30%, while smaller banks approve SBA loans at around 40% or less.

How does SBA determine loan amount?

In determining your eligible amount, the SBA will look at: (a) the total of your debt obligations; (b) operating expenses that mature during the period affected by the disaster, plus the amount you need to maintain a reasonable working capital position during that period; and (c) expenses you could have met and a ...

You submit an offer in compromise

You draft a lump sum settlement or payment plan that you're willing to enact and if accepted, your lender and the SBA will resolve your debt — even if it's less than what you owe.

Most SBA credit lines are part of the CAPLines program, which offers fixed or revolving lines of credit to meet different small-business needs.

SBA 7(a) loans are the most popular type of SBA loan. These loans are federally guaranteed term loans with a maximum loan amount of $5 million. Business owners often use SBA 7(a) loans to finance working capital needs, buy an existing business, refinance debt, or purchase new equipment.

Have a tangible net worth of less than $15 million. Have an average net income of less than $5 million after federal income taxes for the two years preceding your application.

Are SBA loans based on personal credit? Your personal credit score is only one of several criteria that lenders use to evaluate your SBA loan application. Lenders will also consider your annual revenue, time in business, cash flow and collateral, among other factors.

Do SBA loans require a down payment? Yes, the minimum SBA loan down payment requirement is 10% for 7(a) and 504 loans, although this amount can vary based on a business's cash flow and collateral. For example, weak cash flow or low-value collateral can increase the down payment requirement to 30% of the loan amount.

SBA continues to offer other funding options for small businesses, including traditional SBA loans. In February 2024, SBA expanded the eligibility for our Hardship Accommodation Plan (HAP) for borrowers who are struggling with loan payments.

You have poor credit

The SBA doesn't have a minimum credit score requirement, but most lenders want to see an excellent personal credit score (720 FICO and up). This shows the borrower has a long history of making on-time payments and maintains low balances on credit cards and other revolving credit.

Why do SBA loans get denied?

Poor credit, insufficient cash flow, lack of a business plan and other issues can prevent you from securing a small business loan. It can be disappointing when you get denied a business loan, but a denial doesn't mean it's the end of the road.

The minimum credit score required for an SBA loan depends on the type of loan. For SBA Microloans, the minimum credit score is typically between 620-640. For SBA 7(a) loans, the minimum credit score is typically 640, but borrowers may find greater success if they can boost their credit score into the 680+ range.

It can be difficult to get an SBA 7(a) loan if you don't have strong annual revenue, a good credit score (690+) and at least two years in business. SBA 7(a) loan requirements vary from lender to lender, but you'll generally need to meet these criteria to qualify.

The minimum credit score required for the SBA 7(a) business loan is 650.

While SBA loans offer valuable support for struggling small businesses, certain hurdles may affect eligibility. Factors like poor credit, lack of collateral, reluctance to use assets, past government loan defaults, or a criminal record can pose challenges.