SBA microloan: amount, rates and how to apply
SBA Microloan rules for 2026: up to $50,000, terms up to 7 years, rates of about 8% to 13%, what the money can pay for, who qualifies and how to apply.
Published · 7 min read · By the AceTheSBA team
Key points
- The maximum SBA Microloan is $50,000. The average is about $13,000.
- Microloans are made by nonprofit intermediary lenders using SBA funds. The intermediary makes the credit decision, sets the terms and provides business training.
- Terms run up to 7 years, and rates are generally 8% to 13%.
- The money can pay for working capital, inventory, supplies, furniture, fixtures, machinery and equipment, but not existing debts or real estate.
An SBA Microloan is a small business loan of up to $50,000, made by a nonprofit lender that also helps you run the business. For startups and very small businesses that need a modest amount, it is often the most realistic first step into SBA financing.
How the Microloan program works
SBA lends money to intermediaries: nonprofit, community-based lenders such as community development organizations and CDFIs. They lend it on to small businesses. Unlike a 7(a) loan, the intermediary, not a bank, makes every credit decision and sets the terms within SBA’s limits.
Intermediaries also provide management and technical assistance: help with business plans, bookkeeping, marketing and cash flow. Many require training before or during the loan, which is part of what makes the program work for first-time borrowers.
Microloan limits, terms and rates
| SBA Microloan | |
|---|---|
| Maximum amount | $50,000 |
| Average loan | About $13,000 |
| Maximum term | 7 years |
| Interest rate | Set by the intermediary, generally 8% to 13% |
| Collateral | Set by the intermediary; most ask for some, plus a personal guarantee |
What the payments look like: a $13,000 loan over 5 years at 10% is about $276 a month. A $50,000 loan over 7 years at 10% is about $830 a month.
What a Microloan can pay for
- Working capital
- Inventory and supplies
- Furniture and fixtures
- Machinery and equipment
It cannot be used to pay existing debts or to buy real estate. If you need property, look at a 7(a) or 504 loan; if you need to refinance, look at a 7(a) loan.
Who qualifies
- Small, for-profit businesses, and certain nonprofit childcare centers
- Applicants who are U.S. citizens or U.S. nationals living in the U.S.; SBA extended this rule to Microloans in 2026
- Businesses that meet the intermediary’s own credit and collateral requirements
There is no SBA minimum credit score and no minimum time in business. Intermediaries often work with borrowers whom banks would not approve, but they still need to see that the business can repay.
Microloan vs 7(a) Small loan
| Microloan | 7(a) Small loan | |
|---|---|---|
| Amount | Up to $50,000 | Up to $350,000 |
| Lender | Nonprofit intermediary | Bank or other SBA lender |
| Term | Up to 7 years | Up to 10 years for working capital, 25 for real estate |
| Uses | No real estate, no refinancing | Almost any sound business purpose |
| Support | Training and technical assistance | Lending only |
If you need more than $50,000, or the business has a track record and decent credit, a 7(a) loan may cost less. If you are new, need a small amount or want hands-on support, start with a Microloan.
How to apply for an SBA Microloan
- Find intermediaries near you. SBA lists them by state on sba.gov. Contact two or three and ask about their loan sizes, rates, collateral and training requirements.
- Prepare a short business plan. Explain what you sell, who buys it and why, and how the loan will be used.
- Build simple projections. A 12-month cash flow forecast that includes the loan payment is usually enough to start.
- List exactly what the loan buys, with quotes or invoices.
- Gather personal and business tax returns, if you have them, and recent bank statements.
- Be ready to explain your credit. A short written explanation of any past problems helps.
This article reflects SBA’s Microloan program as published on sba.gov in October 2026. Each intermediary sets its own terms within SBA’s limits.