How SBA 7(a) and 504 loans work

The Small Business Administration makes almost none of these loans itself. Private lenders make them, and SBA stands behind part of the debt. That arrangement explains most of what you see in the data: thousands of lenders, very different loan sizes, and a record for every approval.

The 7(a) program

7(a) is SBA's main program, named after the section of the Small Business Act that created it. A bank, credit union or licensed non-bank lender makes the loan and SBA guarantees a share of it, so that if the borrower cannot repay, SBA covers that share of the loss. The guarantee is what lets lenders approve loans they would otherwise decline: longer terms, less collateral, younger businesses.

• Size. Up to $5 million. In FY2021–FY2025 the median 7(a) approval was $190K; most approvals are far below the ceiling.
• Uses. Working capital, equipment, buying a business, real estate, refinancing business debt.
• Terms. Commonly up to 10 years for working capital and equipment and up to 25 years for real estate, which is why the term mix on a lender's page says something about what it finances.
• Processing methods. Lenders in the Preferred Lenders Program approve loans under delegated authority. SBA Express trades a lower guarantee for a faster, lender-run process on smaller loans. CAPLines are revolving lines of credit; Export Express, Export Working Capital and International Trade loans support exporters; Community Advantage was a pilot for mission-based lenders. SBA's file records the method on every approval, and lender pages show the split.

In FY2021–FY2025 SBA approved 305,216 7(a) loans worth $158.2bn through 2,184 lenders.

The 504 program

504 finances major fixed assets: land, buildings, long-lived equipment. A project has three parts. A bank or other third-party lender typically provides about half and holds the first lien. A certified development company (CDC), a non-profit licensed by SBA, provides up to 40 percent through a debenture that SBA guarantees in full. The business puts in at least 10 percent. The CDC portion carries a long fixed rate, with terms of 10, 20 or 25 years.

• In the data the "lender" on a 504 record is the CDC, and the dollar amount is the CDC portion only. The bank's larger loan in the same project is not an SBA loan and is not counted in any dollar figure here.
• Size. The median 504 approval in FY2021–FY2025 was $657K, several times the 7(a) median, because the program finances property.
• Volume. 37,609 approvals worth $38.3bn through 182 CDCs in FY2021–FY2025, 11.0% of all approvals on this site.

What an approval is, and is not

SBA's files record approvals. An approval can later be cancelled before any money moves, which happens to roughly one in eight; it can be disbursed and paid back; or it can be disbursed and eventually charged off. Counts on this site are approvals, because that is what the file counts, and outcome figures use only disbursed loans. How outcomes are measured.

Fiscal years

SBA reports by federal fiscal year, which starts on 1 October. FY2025 ran from 1 October 2024 to 30 September 2025. Every table on this site uses fiscal years and labels them "FY".

Official information

Programme rules change. For current limits, guarantee percentages, fees and eligibility, use SBA's own pages: 7(a) loans and 504 loans. This site describes what was lent; it does not offer loans or advice.