If you’re a small business owner, there’s never been a better time to access the funding you need to thrive. With record levels of capital, government initiatives prioritizing small businesses, and recent reforms making loans more accessible than ever, SBA loans stand out as a key resource for small business owners looking to grow or stabilize their businesses.
Record-breaking support for small businesses
Small business financing has surged to historic levels under the Biden-Harris administration. In fiscal year 2024, the Small Business Administration (SBA) facilitated over 100,000 financings—the highest level recorded since 2008—representing a 22% increase from fiscal year 2023.
This unprecedented growth is fueled by strategic reforms to SBA programs introduced in late fiscal year 2023. These changes modernized lending criteria for small-dollar loans and streamlined the process for lenders and borrowers alike. The reforms also introduced new lenders into the SBA 7(a) program–many of whom specialize in serving underserved communities–helping expand the reach of SBA loans.
As a result, the volume of loans under $150,000 has doubled since 2020. By simplifying documentation requirements and speeding up approvals, these changes have generally made SBA loans easier to access for business owners who need capital for everyday expenses, inventory purchases, or growth opportunities.
What are small-dollar loans and why do they matter?
Small-dollar loans, defined as loans under $150,000, are a cornerstone of small business financing. Unlike larger loans, which typically have stricter requirements to meet because they are higher risk for lenders, small-dollar loans generally provide manageable and flexible funding options for small business owners.
For instance, a small retailer may use a small-dollar loan to stock seasonal inventory, while a service provider could rely on it to bridge cash flow gaps during slower months. These loans maycan make all the difference when it comes to keeping your business running smoothly or planning for growth.
The impact of small-dollar loans is significant. The number of these loans increased by 33% compared to last year. They have also significantly impacted underserved communities, with Black-, Hispanic-, and women-owned businesses seeing loan counts triple, double, and double, respectively, since 2020.
How government loans for small businesses support entrepreneurs
The federal government is crucial in empowering small business owners through targeted initiatives. Government loans for small businesses, including SBA loans, are designed to provide affordable capital to entrepreneurs who may not qualify for traditional funding.
Recent reforms have modernized lending criteria, increasing the availability of small-dollar loans and making it easier for underserved communities—such as minority- and women-owned businesses—to benefit from these programs.
Types of SBA loans and how to use them
SBA loans come in different shapes and sizes, making it easier to find the right fit for your business. Here’s a quick look:
- The SBA 7(a) Loan is the most popular option for good reason—it’s versatile enough to cover working capital, equipment, refinancing, or real estate purchases
- 504 Loans help businesses focus on expansion and modernization. They are typically ideal for purchasing fixed assets like commercial real estate or machinery.
- Microloans are loans of up to $50,000, often used for startups or businesses in underserved markets.
Each of these loan types supports different goals, ensuring that small business owners—from veteran-owned businesses to new startups—have access to the resources they need to succeed.
Why SBA loans may be the best fit for your business
SBA loans come with key benefits that make them attractive for small business owners:
- Lower monthly payments: With longer repayment terms than many traditional loans, SBA loans may help business owners manage cash flow.
- Competitive terms: SBA loans offer attractive interest rates and repayment options designed to support business stability and growth.
- Streamlined application process: Recent reforms have made the process faster and easier, removing barriers that previously slowed down access to funding.
Take advantage of this moment
With unprecedented levels of federal support and expanded access to small-dollar loans, this is an ideal time to secure financing for your business. Whether you’re looking to take advantage of growth opportunities, manage unexpected expenses, or stabilize operations, SBA loans offer a smart, flexible solution.
