Our top picks for government-backed loans from banks, connection services and online lenders.
Finding the right Small Business Administration (SBA) lender can set your business up for success. Some can even save you time by helping with the notoriously complicated SBA loan application. While there’s no clear best lender for all small businesses, our top picks could be a good place to start.
SmartBiz SBA Loans
Get funding for your small business with low monthly payments, extended repayment terms and competitive rates.
- Min. Loan Amount: $30,000
- Max. Loan Amount: $5,000,000
- Low starting APR: 6.75%
- Min. Loan Term: 10 years
- Max Loan Term: 25 years
- Must have been in business 2+ yrs w/ annual revenue of $50,000+ and personal credit score of 600+
The 3 best banks for SBA loans
Banks are one of the most popular choices for small businesses looking for an SBA loan — and for good reason. They often have more experience dealing with the SBA and can set you up with an expert to guide you through the application process.
Going with a big bank might be a particularly good choice if you’re looking for a loan upwards of $1 million, since they often have more resources than their smaller counterparts. But banks might not be ideal if you’re looking for a microloan or one of the SBA’s less-popular programs.
1. Wells Fargo
- Best for: Long-term financing from a name-brand lender with lots of experience.
- Programs: 7(a), 504, Express.
Wells Fargo is one of the top SBA lenders in the country, approving nearly 4,000 SBA 7(a) loans totaling over $1 billion in the first quarter of 2018 alone. Small businesses can apply for up to $5 million through the 7(a) program and $6.5 million through the 504 program. The SBA caps Express loans at $350,000. Whichever program you choose, your business has a choice between fixed and variable rates.
Since Wells Fargo is part of the SBA’s Preferred Lender Program (PLP), it can take the application process into its own hands to speed things up. There’s no waiting around for a month to get SBA approval — Wells Fargo does that itself — so the process is a lot like applying for any other business loan from a bank.
- Best for: Finding a wider range of uses and programs than many banks offer.
- SBA programs: 7(a), 504, Express, Export Express.
Like Wells Fargo, Chase is another big-name bank that’s a top SBA lender. It funded over 2,600 SBA applications to the tune of $600 million in the first quarter of 2018. What sets it apart are its options and flexibility. In addition to the standard 7(a), 504 and Express term loans, you can also apply for an Export Express loan or Express line of credit.
Chase offers 7(a) loans up to $5 million, Express loans up to $350,000 and Export Express loans up to $500,000. There’s no limit to how much you can borrow through the 504 program. Most programs come with a choice of variable or fixed rates, though Express lines of credit only have variable rates and 504 loans only have fixed rates.
3. Celtic Bank
- Best for: Funding large projects, especially construction.
- SBA programs: 7(a), 504, Express.
You may not have heard of Celtic Bank, but this Utah-based provider consistently earns a top spot on the SBA’s list of most active 7(a) lenders. It funded over $400 million in SBA 7(a) loans to over 1,000 small businesses in the first quarter of 2018 alone. And like Wells Fargo, it’s a part of the SBA’s Preferred Lender Program.
Loan amounts run a bit higher than Wells Fargo, capping at $10 million for the 504 program. Celtic’s 7(a) loans start at $350,001 and go up to $5 million. Its Express loans range from $20,000 to $150,000 and come with variable rates. For its other loan programs, borrowers have a choice between fixed or variable rates.
There are some limits to which industries can qualify, however. Convenience stores, gas stations and businesses in the hospitality industry are ineligible for 504 loans. Celtic also only has one branch in Salt Lake City, so you might want to look elsewhere if you were hoping to discuss your application in person.
How much do SBA loans cost?
SBA loans are known for being inexpensive. That’s because the SBA sets limits to how much lenders can charge in interest and fees. Within those limits, lenders have some flexibility. They can decide whether to offer your business fixed or variable rates and the exact rate you qualify for.
Read our page on SBA loan rates to find out what rates to expect with each program.
The 3 best connection services for SBA loans
Want to quickly compare your SBA loan options? Consider trying a loan connection service. These let you review several potential offers from banks and online lenders alike by filling out just one prequalification form.
Some also offer services to help you fill out your application, significantly cutting down on the effort you need to put in. Just be aware that connection services often make money every time they send their partner lenders a lead. This means they’re free for business owners to use, but your interests might not always be the top priority.
- Best for: A relatively fast and hands-off SBA 7(a) application.
- SBA programs: 7(a).
SmartBiz is one of the top connection services for businesses looking for an SBA 7(a) loan. It works with a wide network of lenders offering between $30,000 and $5,000,000 in financing for working capital, refinancing debt or buying real estate or equipment.
Through SmartBiz, you can prequalify in a few minutes and get your funds in as little as a week after finishing the application — though it can take longer for larger amounts. It charges a referral and packaging fee in exchange for finding your business a lender and doing some of the more time-consuming paperwork for you. While it might cost more, it takes less time.
2. Excel Capital Management
- Best for: Finding an SBA preferred lender without packaging or referral fees.
- SBA programs: 7(a).
Excel Capital Management is an online connection service that helps small businesses find a wide range of financing, including SBA 7(a) loans. It only works with banks in the SBA’s Preferred Lender Program, which means whatever lender you’re matched with will have the expertise to guide you through the application process.
It doesn’t charge any packaging or referral fees the way SmartBiz does, but it also doesn’t provide much help with the application after you find your match. It can take as long as one week to get approved and another six weeks to get your funds.
- Best for: Comparing loans from multiple programs.
- SBA programs: 7(a), 504, Express.
Like Excel Capital Management, Lendio is an online connection service that offers a variety of business financing options, including SBA loans. However, it also works with providers offering loans through the 504 and Express programs, in addition to the standard 7(a) loans.
Like with other connection services, you can find out what types of loans you prequalify for by filling out an online form in 15 minutes. There’s no cost to use Lendio, but it typically takes between one and three months to get your funds.
The 3 best online SBA lenders
Business owners might want to look into online lenders if you just barely meet the SBA’s minimum requirements. Online lenders typically have a higher overall approval rate than banks. Some also have more up-to-date technology that can potentially make your application quicker — or at least more painless. However, you might not be able to borrow as much, since few have the resources of a big bank like Wells Fargo or Chase.
1. Main Street Finance Group
- Best for: Business owners who’ve struggled to get an SBA loan in the past.
- SBA programs: 7(a).
Main Street Finance Group is an online lender that provides short- and long-term loans to small businesses, including SBA 7(a) loans. Its 7(a) loans typically start at around $250,000 and go as high as $5 million — sometimes even more.
Main Street specializes in helping small businesses that struggled to qualify for an SBA loan in the past or didn’t think it was even an option. It works with you on improving your business’s finances and your own personal credit score. This means it could take up to a year to get your SBA loan, though Main Street allows you to combine it with its bridge loans to keep your business afloat in the meantime.
- Best for: Established businesses also open to other types of business financing.
- SBA programs: 7(a).
Newtek is the only online lender that ranks in the top 10 list of the SBA’s most active 7(a) lenders. It offers financing up to $10 million with terms as long as 25 years. And it funded over $500 million in SBA loans to over 700 business owners in the first quarter of 2018 — coming in just below Chase.
But you might not know that from visiting Newtek’s website. Instead of having business owners apply for an SBA loan specifically, it has you prequalify for a term loan, line of credit or commercial real estate loan. You then discuss your options with a loan specialist to decide if an SBA loan or other type of financing is the best fit. It’s not a good choice for startups, though: Your business must be around for at least two years to qualify.
3. Ready Capital
- Best for: Entrepreneurs looking for SBA financing.
- SBA programs: 7(a), 504.
Ready Capital is the parent company of Readycap Lending, one of the few other online lenders that makes the SBA’s top 100 list of most active 7(a) lenders. It’s a part of the SBA’s Preferred Lender Program and offers loans to business owners through the 7(a) and 504 programs.
It’s also one of the few truly startup-friendly SBA lenders, with entrepreneurs welcome to apply for its 7(a) program. Loans range from $350,000 to $5 million, so it might not be the best option for businesses with huge construction projects or acquisitions on the horizon.
SBA loans you can apply for today
Top 100 most active SBA lenders
Want even more options? Comb through the SBA’s list of the 100 most active 7(a) lenders for the first quarter of 2018. Lenders are organized by how much they funded in 7(a) loans, not how many businesses were approved.
4 tips for finding the best SBA lender for your business
Ready to begin your search for an SBA lender? Here are some pointers to find the right one for your business.
- Make sure your business qualifies. Qualifying for an SBA loan might not be as easy as you think. Make sure your business is eligible for an SBA loan in the first place before you start comparing lenders.
- Research SBA programs. The 7(a) program is the most popular, but that also means more competition. You might want to look into the 504 or Microloan programs if 7(a) isn’t an exact fit for your small business.
- Figure out your priorities. Decide what matters to your business most and let that guide you when comparing lenders. Do you have time to apply on your own, or do you want to pay a lender to package the application? How long can your business afford to wait?
- Don’t limit yourself to banks. Going directly to a bank might be a popular choice, but banks aren’t the only SBA lenders out there. An online lender might be a better fit for smaller businesses, as can using a service like SmartBiz.
There’s no one best SBA lender for all small businesses. Banks could be a better choice for established businesses looking for a large amount of funds. But online lenders and connection services tend to be quicker and have more forgiving eligibility requirements. There’s also a chance that an SBA loan isn’t right for your small business at all. You can learn more about your financing options by checking out our comprehensive guide to business loans.
Frequently asked questions
There’s no one best SBA lender for all small businesses. Banks could be a better choice for established businesses looking for a large amount of funds. But online lenders and connection services tend to be quicker and have more forgiving eligibility requirements. There’s also a chance that an SBA loan isn’t right for your small business at all.
You can learn more about your financing options by checking out our comprehensive guide to business loans.