June 8, 2024 - 2 Min Read
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Technically you can get an SBA loan between $5k and $5M. How big or how small of a loan you can get will depend on the lender. For example, Community Financial Development Institutions (CDFIs) can lend between $5k and $350k with the SBA CA program. For loans $350k-$5M you will have to use an SBA 7A lender.
There are some SBA 7A lenders that will lend lower amounts, but most don’t like to lend under $350k. Lenders feel large loans take the same amount of time and effort as small loans, so they’ll rather work on the loan that will make them the most money.
So firstly, your loan amount will be determined by which SBA program you qualify for (7A or CA). Besides loan amount, the following factors will also determine which loan program you may qualify for and therefore how much money you can borrow.
If you have poor credit, you will most likely have to go through a CDFI lender as they are mission-based lenders who can approve lower credit scores and challenged credit histories.
If you are a minority business owner or women business owner and you don’t have a lot of money to invest into your business, but you need a loan, you will most likely have to go through a CDFI so you can get the lowest equity injection allowed which is 5%.
Your equity injection will determine how much money you can borrow more than any other factor. You will be capped at whatever percentage you are able to bring to the table. For example, if you want $500k you will need at least 5% which is $25,000. If you only have $10,000 then you cannot get a $500k loan. You will be capped at $200k and it could be less if the lender is requiring a higher equity injection than 5% from you.
To discuss your specific situation and how much you can be approved for in an SBA working capital loan for your business, request your free consult below.
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