SBA Microloan: What the Program Is and How to Find a Lender

The program in four facts

Everything in this box comes from the SBA’s own microloans page, which is linked in the sources below. We keep it to what the SBA states, because program details are easy to garble secondhand.

One more piece of SBA context: the SBA says lenders and loan programs have unique eligibility requirements, and that eligibility generally rests on what a business does to receive its income, the character of its ownership and where it operates. So ask each intermediary about its own requirements rather than assume.

Who an SBA microloan tends to suit

We cannot tell you who will be approved, and neither can the SBA’s summary. What we can do is help you decide whether the program is worth a phone call. Run through this self-check:

• Your need is modest. If your number is closer to the SBA’s average of about $13,000 than to the $50,000 maximum, you are in the range the program talks about.
• You are starting up or expanding. Those are the two purposes in the SBA’s description.
• You are willing to work with an intermediary. The SBA says microloans are provided by intermediary lenders, so ask each one about its own process and paperwork.
• You are not sure other financing is open to you yet. For example, if your business is young, our startup business loans guide explains why the microloan is worth a look for a new owner.

Microloan or a small online offer?

Owners searching for an SBA microloan are often also looking at small offers from online lenders. We are not going to tell you one is always cheaper or simpler, because that depends on the lender and the offer. Instead, here is how to put them on the same footing.

Cost deserves extra care. In the Federal Reserve Banks’ 2025 Small Business Credit Survey, 60% of employer firms that borrowed from online lenders reported that their actual borrowing costs were higher than expected. The same survey found that the share of applicants seeking financing at online fintech lenders grew from 17% in the 2020 survey to 29% in the 2025 survey. More applicants sought financing at these lenders, and most of the survey’s online borrowers found costs higher than expected. Read the full cost before you sign anything, from any lender.

Some states require cost disclosures on certain commercial offers. California’s Department of Financial Protection and Innovation, for example, says its commercial financing disclosure rules cover offers of $500,000 or less and require metrics such as the amount of funding the business will receive, the annual percentage rate, a payment amount if applicable, the term and prepayment policies. Whether any rule covers a specific offer is a question for the provider or your attorney, but the list itself is a good checklist for any offer.

An illustrative cost worksheet

Whatever you are comparing, convert each option into the same three numbers. This example is illustrative only, with made-up figures for two offers of the same size:

Here Option 2 costs $1,300 more for the same money. Then layer on the payment schedule and how long you will be paying, since a cheaper option with payments you cannot meet is not cheaper. Real offers will look different, and the actual lender written terms govern.

How to find an intermediary, step by step

1. Write down your number and your purpose. The amount, what it buys, and the smallest amount that would still work.
2. Start from the SBA’s microloans page. Read the program description there, then ask the SBA or your local lenders how to reach an intermediary.
3. Make a short list and call each one. Ask whether it serves your location and industry, and whether it works with businesses at your stage.
4. Ask for the full document list up front. Then gather everything before you submit, so the application is complete on the first pass.
5. Get the cost in writing. Interest rate, every fee, payment schedule and total repaid, so you can fill in the worksheet above.
6. Ask about collateral and guarantees. If the answer involves a lien on business assets, our guide on what a UCC filing is explains what to look up and ask.

For how microloans sit next to the SBA’s 7(a) and 504 programs, see our guide to SBA loan requirements.

Where States Funding fits, and where it does not

States Funding is not a lender, not an SBA intermediary, and does not offer SBA microloans. It runs a platform that matches U.S. small and medium businesses with offers from independent third-party lenders, and those lenders decide approval, rates and terms. Offers through its network cover business lines of credit, small business term loans, revenue-based financing, invoice financing and non-dilutive capital.

If you want a second set of numbers next to a microloan quote, and your business is past the typical floors of about 6 months in business and $10K or more in monthly revenue, you can apply and see what comes back. It costs $0 to apply, with no obligation to accept an offer. States Funding does not charge you a fee; lenders pay it a referral fee on funded deals, and lenders may charge their own fees. Applying and comparing uses a soft credit pull only, with no impact to your credit score, and only the final acceptance step needs a brief credit unlock for the lender. You can connect your bank through Plaid or upload the last four months of statements, though lenders may ask for more.

Any offer you qualify for is shown side by side with full term details, total payback and effective APR, which drops straight into the worksheet. There is no guarantee of an offer or of funding by any date, and an offer is non-binding until you e-sign the lender’s funding agreement, which then governs the loan, fees and repayment. Read how States Funding works for the full picture.

This guide is general information for U.S. business owners, not financial, legal or tax advice. States Funding is not a lender. Loans, advances and other financing products are originated and serviced by independent partner lenders, and States Funding does not guarantee that any application will result in an offer. Any examples are illustrative. The actual lender written terms govern any offer you receive.