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Personal Loans

What Is a Loan Agreement and What Does One Look Like?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

If you’re taking out any kind of loan, you should be familiar with the contract that will dictate the terms of that loan. Your loan agreement will tell you about responsibilities and expectations on both the lender side and the borrower side. Here we will focus mainly on agreements for personal loans.

What is a personal loan agreement?

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When taking out any kind of loan, including a personal loan, you’ll have to sign a loan agreement in order for a loan company to disburse the funds to you. This agreement may also be called a promissory note.

The loan agreement is a legal contract that specifies the responsibilities and expectations of both the lender and borrower in the transaction. It’s important to understand the terms and conditions of the loan in order to avoid getting into a precarious financial situation after taking it out.

The importance of these agreements is that they will also be a guide in the case of a breach or violation on either side, said Brian Locker, partner at Fowler St. Clair in Mesa, Ariz. Locker practices civil litigation and regularly represents consumers with claims against lenders and businesses.

“In the event of any conflict between you and the lender during the term of the loan, the resolution will almost certainly be dictated by the terms of that agreement,” Locker said.

For example, there may be steep penalties for missing payments or provisions in an agreement that allow the lender to sue you in court and require you to pay the legal fees in case of default.

These are very serious repercussions, so it’s best to know if you are exposing yourself to these risks before signing your name on the dotted line.

What is a personal loan?

Before signing a loan agreement, you should have full knowledge of the kind of loan you are taking out. One such loan may be a personal loan.

You can get a personal loan from a bank, credit union or online lender. Personal loans can be used for a variety of purposes such as consolidating debt, renovating a home or covering emergency expenses. Some personal loans have stipulations (usually stated in the agreement) on what you can and cannot use the money for.

These types of personal loans are generally unsecured loans. Unlike a home loan or auto loan, these loans are not secured by any type of collateral. These loans are also different from credit cards because you receive a lump sum of borrowed money upfront, and there is a fixed amount of time in which the loan has to be paid off. When dealing with a bank or finance company for a personal loan, you must sign a loan agreement before you receive the money you’re borrowing.

“Personal loan” may also refer to borrowing money from a private party, such as a loan between family members or friends.

How can I get a personal loan?

As mentioned, unsecured personal loans are usually not backed by an asset, meaning the lender may not seize an asset and sell it to recoup the loan amount if you fail to repay it. If you don’t pay back the loan in this case, the lender could lose the money it provided.

To mitigate this risk, personal loan lenders often set strict borrower criteria and qualifications for unsecured loans. Personal loan companies will look closely at your credit score, existing debt obligations and income history during the application process.

Some lenders will allow you to see loan rates you might qualify for by doing a soft pull on your credit report (soft pulls don’t affect your credit). Other lenders may generate a hard inquiry record on your credit report, which could negatively affect your credit score. Make sure you know whether the lender is conducting a soft or hard pull on your credit before you request a rate quote.

Why do you need a loan agreement?

Though the general public can be distrusting of lenders and especially wary of the contracts they’ll sign to borrow money, rest assured that your loan agreement can actually give you rights in the lending process as well.

Rebecca Neale of the Personal Finance Lawyer is a family law attorney whose work often intersects with consumer law issues.

“Just because a loan contract specifies what happens in case of default doesn’t mean that the lender expects you to default,” said Neale. “The purpose is to inform both parties of their responsibilities and liabilities in case of default.”

Loan agreements, in part, make sure banks can lend money affordably. To do so, they must manage the risk of default by giving borrowers clear, consistent terms for repayment.

Loan agreements should also be in place when lending money to friends and family. You may think a formal document isn’t needed for a transaction with loved ones, but the IRS has restrictions on money flowing between individuals. According to the gift tax, individuals are allowed to give up to $15,000 to any one person before tax implications kick in (this means married couples can give up to $30,000).

Your loan agreement for private-party loans will prove to the IRS that the money is not a gift and therefore not subject to the gift tax (which the giver usually pays). Plus, a loan agreement with clear terms and repayment guidelines can help save personal relationships that could otherwise be ruined by money misunderstandings.

These personal loan agreements between private parties are not hard to find. You can do a quick search online for “personal loan agreement templates,” or ask an attorney to draw one up for you. The cost may be well worth it to have a clear understanding of each person’s responsibility in a personal loan situation.

What is contained in a loan agreement?

When it comes to dealing with commercial entities such as banks or financial companies, most lenders have a standard personal loan agreement that serves as a binding contract for borrowers.

Here are the standard sections and items you’ll see in your personal loan agreement:

Principal loan amount

This is how much money you are borrowing. Personal loans typically range from $5,000 to $100,000.

Borrower, cosigner and lender information

This will contain personal identification information for borrowers, such as name and address. The lender’s information will also be in the contract.

Interest amount, calculation method and rate type

There are many combinations of interest types and rates possible for personal loans. Most personal loans are amortizing, which means payments are equally spaced with a simple (not compound) interest rate. This rate is often expressed as an annual percentage rate (APR). But there are other options and terms you should know about when it comes to these loan variations:

  • Compound interest: Interest charged on a total outstanding loan balance, including the principal and previously accrued interest.
  • Simple interest: Interest charged on a principal balance that is not then added to the principal balance.
  • Variable interest rate: An interest rate that changes over time, often based on prevailing market interest rates.
  • Fixed interest rate: An interest rate that does not change over time.
  • APR: The cost of borrowing money over the course of a year, including interest and fees, expressed as an interest rate.
  • Interest rate: The cost of borrowing money, expressed as a percentage of the loan amount.

If you are unsure of how the terms will affect your monthly payment, check the Truth in Lending Disclosure for your loan, which will give you a summary of your loan agreement for review purposes. It’s usually given to you by the lender before you officially accept the loan by signing the agreement. This disclosure is not your loan agreement but is useful for knowing upfront the costs of borrowing money before entering into the loan contract.

Date of loan transaction

This serves as the first date of your loan term.

Loan repayment term length

The term is how long you will take to pay the loan back. Terms for personal loans vary and are often between six and 84 months.

Loan payment method and due date

This section informs you of where to send your payment and the date it is due each month. If you don’t send your payment in accordance with the contract, your payment could be considered late or missed. Furthermore, changing repayment methods could increase your initial APR (e.g., paying with a check versus automatic [ACH] withdrawal.)

Return payment fees

If for some reason your payment is returned, this is the fee you will be charged.

Origination fees

Some lenders charge fees to process a loan application. This can be expressed as a flat fee or a percentage of your loan amount. The origination fee is often deducted from your initial loan disbursement from the lender.

Prepayment fees and penalties

You may be subject to penalties or fees for paying off a loan before the term is over.

Application of payment

This explains how your payments are applied and in what order they are applied to the principal, fees, interest, etc.

Penalties for missed and/or late payments

This section will tell you what exactly constitutes a late or missed payment.

State law notices

Contains special notices and legal provisions for residents of certain states.

What happens if the loan contract is violated?

A loan contract can be violated in a number of ways. On the borrower side, a violation may occur when a lender determines the borrower is in default. Default can happen for a variety of reasons, from missing payments to misusing loan funds.

In this case, the lender can demand funds be repaid in full. In addition, the borrower may have to agree to pay all costs of collecting delinquent payments and reasonable attorneys’ fees.

J.R. Skrabanek is a consumer law attorney and senior counsel at The Snell Law Firm, in Texas. He said that, when consumers violate a loan contract, there may be recourse if they actually show up in court. “In general, courts may be more willing to forgive unsophisticated consumers for mistaken contract violations than large companies,” he said. “However, contracts are usually enforced as written, and you very often have to go to court to enforce your rights.”

On the lender side, it’s rare that loan agreements are violated. However, lenders that engage in predatory lending practices or illegal debt collection practices could be violating state and federal laws that expressly forbid these kinds of activities. Skrabanek said such things may not violate the loan contract but may be punishable under regulations such as the Fair Debt Collection Practices Act.

Common legal terms

  • Usury and predatory protections: Laws that protect consumers from illegal and harmful lending practices.
  • Mandatory arbitration: A clause that requires borrowers to agree to an arbitration process to settle disputes over a loan agreement.
  • Breach or default: Failure to fulfill a contract obligation.
  • Contract length and amortization: Defines the loan term and whether or not loan payments are fully or partially amortized over that term.
  • Choice of law: States the jurisdiction under which the provisions of the loan agreement will be governed.
  • Severability clause: States that if some parts of the loan agreement are found to be illegal or otherwise unenforceable, the remaining provisions are still valid and enforceable.
  • Entire agreement clause: States that the loan agreement presented is complete.
  • Default provisions: Defines criteria that constitute a default event for borrowers.
  • Loan security: The collateral (some type of asset) pledged for a loan.

Bottom line

A personal loan agreement exists to protect both you and the lender. Before you take out a loan, make sure you have a full understanding of what this agreement entails, and what all the terms involved mean.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Small Business

Alternative Lending Options: Finding the Top Non-Bank Business Loans

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

business lenders

Starting a business can be difficult. Finding funding for a business can be even harder. If you want to work with the best business financing companies, you’ll have to do some research, but it will be worth it.

Being in business can be stressful enough, so it’s a good idea to find a lender that is flexible, responsive and can offer you your best terms and rates for the financial products you’ll need to support your business. Check out these twelve alternative lending options and discover which one best fits your financial situation.

Choosing the right alternative lending company

You’ll want to be very selective when considering alternative lending companies. Understanding the terms they offer is important so you are not locked into a deal that isn’t right for you or your business.

For example, if you are looking for equipment financing, but you are working with a lender that specializes in lines of credit, you may not get your best rates and terms available for your business. A lender that requires you to personally pledge assets is not a great fit for you if you don’t own anything to pledge.

Another consideration is working with a lender that understands your industry. The underwriting process is designed to mitigate risk for lending institutions. If they do not understand your business or industry, they may deem it risky.

Some things to consider when looking for an alternative lending option:

  • Type of financing offered: This includes lines of credit, equipment financing, etc.
  • Terms: This includes interest rates, application fees, length of loans, etc.
  • Requirements: Personal credit score or amount of time in business
  • Speed: How quickly can a lender fund your loan?

The good news is that there are plenty of players, old and new, in the small business financing space. Once you understand your needs, you can get rates and terms from a few lenders and then choose the one that works best for you and your business.

OnDeck Capital

Loans offered:OnDeck Capital offers offers small business loans to U.S.-based companies. OnDeck Capital’s products include business loans, lines of credit and equipment financing.

Terms: OnDeck Capital’s short-term loans range from 3 to 12 months. Its long-term loans are from 15 to 36 months.

Fees: For the terms loan, there are origination fees based on whether you’ve gotten a loan from OnDeck before.

  • 1st loan: 2.5 to 4 percent of loan amount
  • 2nd loan: 1.25 to 3 percent of loan amount
  • 3rd+ loan: 0 to 3 percent of loan amount

The line of credit has a $20 monthly maintenance fee. The fee is waived for six months if you draw $5,000 or more in the first five days after opening your account.

Requirements: You must be in business at least one year and have over $100,000 in revenue over the last 12 months. A personal credit score of over 600 is required. Your business cannot be in one of the restricted industries OnDeck Capital will not lend to.

Time to funding: Loan funds can be disbursed as fast as one business day.



on LendingTree’s secure website

CAN Capital

Loans offered:CAN Capital provides term loans and merchant cash advances.

Terms: Loan terms last from 6 to 18 months.

Fees: There is a 0.00% - 3.00% origination fee for term loans. MCAs have a $395 administrative fee.

Requirements: Term loans require a personal guarantee from the owner and more than six months in business. The business should have at least $150,000 in gross revenues. MCAs don’t require any collateral.

Time to funding: Funds can be in your account in as little as two days.


on LendingTree’s secure website


Loans offered:Credibly offers working capital loans, business expansion loans and MCAs.

Terms: Working capital loan terms are from 6 to 18 months. Business expansion loan terms are for 18 or 24 months.

Fees: For all loans, there is a one-time setup amount that is 0.00% - 2.50% percent of the loan or total cash advance.

Requirements: For the working capital loan and MCA, Credibly requires the applicant to have a FICO score of 500 or higher, more than six months in business and $15,000-plus in average monthly bank deposits. The business expansion loan requires applicants to have a FICO score of at least 600, more than three years in business and $15,000-plus in average monthly bank deposits along with $3,000-plus in average daily balances.

Time to funding: You can receive funds in your account as soon as the same day.



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All loans through Credibly are originated by WebBank, member FDIC.

National Funding

Loans offered:National Funding offers small business loans, along with equipment financing and leasing. For the small business loans, National Funding as a number of options:

Terms: Small business loans are for amounts between $5,000 and $500,000.

Fees: Information not available online.

Requirements: Small business loans require at least one year in business, $100,000 in annual gross sales and three months of bank statements. Equipment financing and leasing requires at least six months in business, a FICO score over 620 and an equipment quote from a vendor.

Time to funding: Funds can be received in as little as one day.

National Funding


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Fora Financial

Loans offered:Fora Financial offers small business loans and MCAs.

Terms: The term on Fora Financial’s small business loans is up to 15 months. The MCA doesn’t have a set term.

Fees: Fees are based on individual and/or business credit profiles and determined at the time of approval.

Requirements: The small business loans requirements include: at least six months in business, $12,000 minimum in gross sales and no open bankruptcies.

Time to funding: You can receive funds in as little as 72 hours after your loan approval.

Fora Financial


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The Business Backer

Loans offered:The Business Backer offers term loans, MCAs, lines of credit and SBA loans.

Terms: Terms will depend on the type of loan you choose:

  • Term loans for $5,000 to $350,000 have one- to three-year terms
  • MCAs for $5,000 to $200,000 have daily weekly or semi-monthly payments
  • Business lines of credit for $5,000 to $150,000 have one- to two-year terms
  • SBA loans from $3,000 to $350,000 have terms up to 10 years

Fees: Fees vary based on loan product.

Requirements: Businesses must have a minimum of one year in operation and $180,000 in annual gross revenue. Then you can begin the prequalification process for a loan.

Time to funding: Once you accept The Business Backer’s offer of funding, typical closing times are only a few business days.

The Business Backer


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Loans offered:BlueVine offers invoice factoring and lines of credit.

Terms: Lines of credit for up to $250,000 can be paid back weekly over six or 12 months. Invoicing factoring limits can go as high as $5 million.

Fees: Fees are based on individual and/or credit profiles and determined at the time of approval.

Requirements: For the BlueVine line of credit, you’ll need a FICO score of 600 or higher, more than six months in business and at least $100,000 in revenue. For invoice factoring, you will need a FICO score of at least 530, more than three months in business and $100,000 in annual revenue. Your business must serve other business customers.

Time to funding: BlueVine responds to applications within 24 hours. For funding, you can choose between ACH electronic transfers or bank wire transfers. ACH transfers usually appear the next business day, but could take up to three days.



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Forward Financing

Loans offered:Forward Financing offers a variety of financing options up to $300,000 based on your business needs. To find out the products you are eligible for along with related rates, terms and fees, you must complete a loan application with Forward Financing.

Terms: Term varies based on business and product.

Fees: Fees vary based on business and product.


  • Owner’s name
  • Owner’s Social Security number
  • Business name
  • Business employer ID or tax ID
  • Recent bank statements for the business

Time to funding: Information not available online.

Forward Financing


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Loans offered:Kabbage has several small business financing options of to $250,000. Unsecured loan products include:

  • Business lines of credit
  • Working capital loans
  • Online loans
  • Professional loans
  • Commercial loans
  • Short-term business loans
  • Inventory loans

Secured loan products include:

  • Equipment loans
  • Merchant cash advance
  • Factoring
  • SBA loans

Terms: Kabbage offers 6– and 18-month terms for its loan options.

Fees: Your fee rate will be between 8.00% and 24.00% of the principal loan amount and is determined based on your business performance factors.

Requirements: You must have at least one year in business and have at least $50,000 in annual revenue or $4,200 per month over the last three months.

Time to funding: Approval can take minutes. After that, once the loan agreement is signed, funds are sent to an account of your choosing. Loans deposited via a PayPal account can be in your account in minutes.
Loans deposited to your business checking account can take up to three days to process, depending on your bank. You may also withdraw funds using your Kabbage Card. The loan proceeds are issued immediately in this case.


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Reliant Funding

Loans offered:Reliant Funding offers short-term loans, MCAs and equipment loans.

Terms: Terms and rates depend on the loan type and your business credit profile.

Fees: Information not available online.

Requirements: Must be in business with current owner for at least one year and have at least $100,000 per year in revenue with no open bankruptcies.

Time to funding: Loans can be disbursed as soon as one day.

Reliant Funding


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Expansion Capital

Loans offered:Expansion Capital offers various small business loan products from $5,000 to $500,000. Amount and terms will vary based on individual business qualifications.

Terms: Loans are offered for 4 to 12 months.

Fees: Terms, fees and rates may vary by application. To find out the amount you qualify for, along with related terms, complete an application.

Requirements: Must be in business for more than six months, have a personal credit score of at least 500 and annual sales of at least $100,000. The business must not operate in any restricted categories set forth by Expansion Capital.

Time to funding: You can receive a quote on your loan within 24 hours. Money can be deposited in your account as little as two business days.

Expansion Capital


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Rapid Finance

Loans offered:Rapid Finance has lending products that cover: small business loans, SBA bridge loans, MCAs and lines of credit.

Terms: Small business loan terms are up to 60 months and funding amounts range from $5,000 to $1,000,000.

Fees: Fees will vary based on the product and your business credit profile.

Requirements: For small business loans and MCAs, you must be in business for two years or longer and have monthly revenue of at $5,000 or more.

Time to funding: You can receive funds in as little as one day.

Rapid Finance


on Rapid Finance’s secure website

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Small Business

SBA Startup Loans – Know Your Top Options

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

SBA startup loan

If you are looking for funding for your new business, you may have considered a U.S. Small Business Administration startup loan. There are many funding options to choose from, so you want to make sure that you do your research to find the option that works best for your business. Here are some tips, guidelines and things to consider in your research for an SBA startup loan.

The cost of starting a business

Determining how much money you need to start your business can take time. It will depend on your business model and what industry your business is in. Here are some things to consider so you can plan for how much startup financing you might need.

Initial fees

One of your first expenses will likely entail creating a legal structure for your business, and you may also need to pay to file articles of incorporation with your state. Even if you don’t plan on incorporating your business, you may require federal or state licensing and permits, which aren’t free, either.

Office space

Whether you need an entire store to set up shop or a single office, you’ll need to add the cost of renting or buying space to operate your business. If possible, consider starting the business from your home to reduce your overhead in the beginning, just make sure you’re following any community or neighborhood rules. You can read more about how to run a business from home without breaking any rules on LendingTree. MagnifyMoney is a subsidiary of LendingTree.

Equipment and inventory

Every business needs startup equipment, even if you’re a one-person operation. Needs vary by industry and may include vehicles, computers, machines or furniture. The costs of inventory are all across the board, too. If you’re opening a business in retail, wholesale or distribution, you’ll need to calculate inventory costs upfront.


You won’t get many customers if no one knows you exist, so it’s pretty important to add marketing and advertising costs to your business budget. You may want signs, banners or business cards to promote your business, along with a well-designed website. With more than half of small businesses reportedly operating without a website, having one will give you an instant advantage.

For other startup costs, you could use the SBA’s startup costs worksheet to provide a better understanding of how much capital you’ll need for your startup financing.

How to secure an SBA startup loan

Not only does the SBA offer tools to help you plan your startup costs, it also offers training programs and education to grow your business, too. As you navigate the seemingly endless list of expenses you’ll need to cover to get your business off the ground, the SBA can help.

Jessica Mayle, district public affairs specialist at the SBA’s Illinois office, said, “Before seeking a loan, a small business owner should make sure he or she has a solid business plan, financial projections, collateral and other necessary materials. Working with a counselor from a Small Business Development Center or SCORE can help increase your chances of success.”

Though definite requirements vary by type of small business loan, here are a few general guidelines your business must meet:

  • You’ve exhausted all other private financing options.
  • You’re considered a small business.
  • You’ve been in operation more than two years.
  • You have a good personal credit score.
  • You have had no bankruptcies or foreclosures in the past three years.
  • You’re prepared to use personal assets as collateral to guarantee your loan.

Additionally, if you don’t already have a solid business plan in place, now is the time to create one. A detailed business plan that includes financial forecasts and statements is a requirement for any startup financing, including SBA loans.

The best SBA startup loans for 2019

SBA loans can be helpful for any business looking for startup financing. Through its partnerships with lending institutions like banks, microlenders and community organizations, the SBA can connect you with its best lenders for your small business.

Depending on what you want to use your SBA loan for and how much startup financing you need, there are a few options to consider.

SBA 7(a) Loans

As the most common type of SBA loan, these go up to $5 million and are used for almost any business purpose. SBA 7(a) loans add anywhere from 2.2 to 4.75% to a lender’s base rate and loans can be repaid from 10 to 25 years, depending on the purpose of the loan.

Minimum requirements:

  • Must be a for-profit business
  • Meets SBA size standards
  • Shows good character, credit and management; and the ability to repay
  • Must be an eligible type of business

Used for:

  • Funding startup costs
  • Purchasing equipment
  • Purchasing new land (including construction costs)
  • Repairing existing capital
  • Purchasing or expanding an existing business
  • Refinancing existing debt
  • Purchasing machinery, furniture, fixtures, supplies or materials

Two popular loans frequently accessed as part of the 7(a) loan program are the SBA Express Loan and the SBA Advantage Loan. With the Express Loan Program, your borrowing is capped at $350,000 but processing time is expedited for a quicker approval.

Advantage Loans are geared toward businesses that might not qualify for the standard 7(a) loan because of low revenues or other reasons. Though it does offer the same expedited service, the Advantage Loan limits lending to $250,000.

SBA 504 Loans

With a specific focus on small businesses looking to buy or build commercial real estate, the SBA 504 loans provide up to $5.5 million in financing. The SBA also facilitates the partnering of banks with a community development corporation (CDC) to cover the cost of funding the loan.


  • Alternative Size Standard: For-profit businesses that do not exceed $15 million in tangible net worth
  • Cannot have an average of two full fiscal years’ net income over $5 million
  • Owner-occupied 51% for existing or 60% for new construction

Used for:

  • Purchasing machinery and equipment
  • Fixtures, leasehold improvements
  • Working capital

This loan cannot be used to repay existing debt.


If your business needs help with recurring payments or an unexpected expense, the CAPLines Program has five line-of-credit products designed for different goals and provides up to $5 million in financing.

The repayment term can be from five to 10 years.


  • Must be a for-profit business
  • Meets SBA size standards
  • Shows good character, credit and management; and the ability to repay
  • Must be an eligible type of business.

Used for:

  • Financing seasonal and/or short-term working capital needs
  • Cost to perform
  • Construction costs
  • Advances against existing inventory and receivables
  • Consolidation of short-term debts

Not sure which of the five programs are right for you?

Here’s a quick overview:

  1. Seasonal Line of Credit: Covers seasonal increases in inventory needs, labor costs or accounts receivable.
  2. Contract Line of Credit: Used for materials and labor needed for assignable contracts.
  3. Builders Line of Credit: Designed for contractors that build or renovate residential or commercial buildings.
  4. Standard Asset-Based Line of Credit: Allows small businesses to convert short-term assets, such as outstanding invoices, to cash.
  5. Small Asset Based CAPLines: Revolving Line of Credit to finance short-term working capital needs of the borrower.

SBA Export Loans

For global-business seekers, the SBA Export Loan provides funding to expand exports, participate in international transactions and enter new foreign markets. Repayment terms extend up to 25 years.


  • Must be a for-profit business
  • Meets SBA size standards
  • Shows good character, credit and management; and the ability to repay
  • Must be an eligible type of business
  • Engaged in or preparing to engage in international trade
  • Adversely affected by competition from imports

Used for:

  • Permanent working capital
  • Equipment
  • Facilities
  • Land and buildings
  • Debt refinance related to international trade

If you’re seeking a quicker funding opportunity, the SBA Export Express Loan is another option, though you’re limited to $500,000 in financing. There’s also the SBA Export Working Capital Loan that allows up to $5 million to help cover the costs associated with entering a new export marketing or expand in an existing one.

SBA Microloans

While most loans are geared toward for-profit businesses, SBA Microloans are specifically designed to provide loans to nonprofit intermediaries who then lend amounts of less than $50,000 to for-profit small businesses and nonprofit child care centers. You’ll have up to six years to repay a microloan .


  • Must be a for-profit business
  • Meets SBA size standards
  • Shows good character, credit and management; and the ability to repay
  • Must be an eligible type of business

SBA Disaster Loans

When natural or human-made disasters strike, small businesses can suffer immensely. The SBA Disaster Loans offer financial help for businesses to recover from a declared disaster.

Depending on the type of emergency, there are three types of loans to choose from:

  • Physical Disaster Loans
  • Economic Injury Disaster Loans
  • Military Reservists Economic Injury Loans

Borrowing through this program gives you access to as much as $2 million, with a repayment period of up to 30 years. The interest rates of 4 to 8 percent are quite reasonable, too.


  • Business must have suffered damage from a physical or economic disaster
  • Military Reservist loans are offered when essential employees are called to active duty

Used for repairs/replacement of:

  • Real property
  • Machinery
  • Equipment
  • Fixtures
  • Inventory
  • Leasehold improvements

Finding the right SBA loan for your small business

Determining how much funding you need and what type of SBA loan you should apply for is a tedious and time-consuming task.

Your local SBA District Office can help with personalized one-on-one guidance to calculate your startup financing needs and to select the right loan program. Finding the right SBA loan will push you through the difficult first few years to grow into a well-established and successful small business.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.