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SBA Microloan Requirements: Who Qualifies and How to Apply
An SBA microloan is a loan of up to $50,000 made through a nonprofit intermediary lender, not by the SBA itself. To qualify, your business must be an operating, for-profit small business located in the U.S. that isn't an ineligible type. Each lender makes its own credit decision and sets the loan terms.
- $50,000An SBA microloan is a small loan, up to $50,000, that helps small businesses and certain nonprofit childcare centers start up or grow.
- $13,000Average loan: about $13,000, according to the SBA.
- 8%Interest rates: set by the lender, generally between 8% and 13%, according to the SBA.
- 13%Interest rates: set by the lender, generally between 8% and 13%, according to the SBA.
An SBA microloan is a small loan, up to $50,000, that helps small businesses and certain nonprofit childcare centers start up or grow. The SBA doesn't lend the money directly. It funds nonprofit, community-based intermediary lenders, and those lenders decide who gets a loan and on what terms. To qualify, your business generally has to be an operating, for-profit business located in the U.S., small under SBA size standards, and not an ineligible business type. Beyond that, each lender sets its own requirements.
Last checked: October 31, 2026. This page explains the rules only. It is general information, not legal, tax, or financial advice.
The short version
| Maximum loan | $50,000, and no borrower can owe one intermediary more than $50,000 at a time. |
|---|---|
| Average loan | about $13,000, according to the SBA. |
| Repayment | up to 7 years. |
| Interest rates | set by the lender, generally between 8% and 13%, according to the SBA. |
| Uses | working capital, inventory, supplies, furniture, fixtures, machinery and equipment. |
| Not allowed | paying off existing debt or buying real estate. |
| Who decides | the intermediary lender makes all credit decisions and sets the terms. |
Who qualifies
- According to the SBA, to be eligible for a microloan a business must:
- Be an operating business.
- Operate for profit (certain nonprofit childcare centers are the exception).
- Be located in the U.S.
- Be small under SBA size standards.
- Not be a type of business the SBA lists as ineligible.
- Federal rules also bar microloans to businesses with an owner or associate who is currently incarcerated.
- The SBA doesn't review microloans for creditworthiness; each intermediary makes its own credit decision and sets the terms.
- Intermediaries also provide business training and technical assistance, and lenders may have their own requirements for things like credit history, collateral or a personal guarantee.
How big a loan you can get
Federal rules say intermediaries generally should not lend more than $10,000 to one borrower. A loan above $20,000 is allowed only when the borrower shows it can't get credit elsewhere at comparable rates and has good prospects for success. The hard cap is $50,000. In practice, that means smaller first loans are common, and larger amounts usually need a stronger case.
How to get it
How to get started
- Check that your business is eligible: for-profit, operating, U.S.-based, small, and not an ineligible type.
- Write down how much you need and exactly what you'll buy with it. Microloans can't refinance debt or buy real estate.
- Find an SBA-approved microlender in your state on the SBA's list of microlenders.
- Contact one or two lenders and ask about their credit, collateral, training and paperwork requirements, plus the rate and term they typically offer.
- Gather what the lender asks for, which may include a business plan, financial statements or projections, tax returns, and credit information.
- Apply with the lender. It makes the credit decision, not the SBA.
Programs that may match
Look beyond microloans
FAQ
FAQ
What is the maximum SBA microloan amount?
$50,000. Federal rules also say no borrower can owe one intermediary lender more than $50,000 at any one time.
Does the SBA lend the money directly?
No. The SBA funds nonprofit intermediary lenders, and those lenders make the loans, decide who qualifies and set the terms.
What credit score do I need for an SBA microloan?
The SBA doesn't review microloans for creditworthiness or publish a minimum score for them. Each intermediary lender makes its own credit decision, so ask the lenders in your area.
Can I use a microloan to start a business?
Yes. The SBA says microloans can help small businesses start up and expand, as long as the business meets the eligibility rules and the lender approves it.
What can't I use a microloan for?
The SBA says microloan money can't be used to pay existing debts or to buy real estate.
How long do I have to repay an SBA microloan?
Up to 7 years. The actual term depends on the amount, how you'll use it, the lender's requirements and your needs.