Compare SBA loans and traditional business loans to find the right option for your business.
SBA loans vs traditional business loans: SBA loans offer lower rates (6-13% APR), longer terms (5-25 years), and higher amounts (up to $5M) but require extensive documentation, 2+ years in business, and take 4-12 weeks to approve. Traditional business loans (banks/credit unions) offer competitive rates (5-10% APR), moderate terms (1-10 years), and faster approval (1-4 weeks) but require strong credit (680+) and established business. Best for SBA: Established businesses needing large amounts with low rates. Best for traditional: Businesses with strong credit needing faster funding.
| Factor | SBA Loans | Traditional Business Loans |
|---|---|---|
| Interest Rates | 6-13% APR (lowest) | 5-10% APR (competitive) |
| Loan Terms | 5-25 years (longest) | 1-10 years (moderate) |
| Loan Amounts | Up to $5M | $50k-$2M+ |
| Approval Time | 4-12 weeks (slowest) | 1-4 weeks (moderate) |
| Credit Requirements | 650-680+ (moderate) | 680-700+ (strict) |
| Time in Business | 2+ years (strict) | 1-2+ years (varies) |
| Documentation | Extensive (most) | Moderate |
| Government Backing | Yes (SBA guarantee) | No |
| Use Restrictions | Some restrictions | Fewer restrictions |
Government-backed loans guaranteed by the Small Business Administration. SBA doesn't lend directly but guarantees loans made by approved lenders, reducing lender risk and enabling better terms.
Learn more about SBA loan programs.
Loans from banks, credit unions, or traditional lenders without government backing. Offered directly by lenders based on business creditworthiness.
Explore all business loan programs.
Traditional loans are faster (1-4 weeks) than SBA loans (4-12 weeks). Choose traditional if you need funds quickly.
SBA loans offer better rates (6-13% vs 5-10%) and longer terms (5-25 years vs 1-10 years). Choose SBA if you want lowest cost.
SBA loans offer higher amounts (up to $5M) than traditional loans ($50k-$2M+). Choose SBA for large financing needs.
SBA requires 2+ years in business and extensive docs. Traditional requires stronger credit (680-700+) but less documentation. Choose based on your strengths.
Yes, but apply to one at a time. Multiple applications create multiple credit inquiries. Choose based on your needs and timeline.
Depends on your situation. SBA loans have government backing but stricter requirements. Traditional loans require stronger credit but less documentation. Both have similar approval rates for qualified applicants.
Yes, SBA offers refinancing programs. Can help lower rates and extend terms. Requires meeting SBA requirements and going through application process.
Yes, both typically require personal guarantee. SBA loans always require it. Traditional loans usually require it unless you have very strong business credit. Learn about personal guarantees.
Compare options and apply now. Get a decision in 24-72 hours for traditional loans, or explore SBA options.
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