SBA loans are one of the most sought-after business financing options available, offering low interest rates, extended terms, and higher borrowing limits than traditional loans. These advantages, however, come with strict qualification requirements and an involved application process.
For entrepreneurs looking to scale their business without tapping into personal savings or high-interest credit, SBA loans provide an affordable alternative. The key to securing approval? Understanding how SBA loans differ from traditional business term loans.
The Small Business Administration (SBA) is a government agency that supports small businesses by guaranteeing a portion of their loans. However, the SBA does not directly lend money—you must apply through an SBA-approved lender, such as a bank, credit union, or alternative lending platform like Tree of Life Funding.
Manage payroll, inventory, and day-to-day expenses.
Loan Amount – Up to $5M
Terms – Up to 25 years for real estate, 10 years for other uses
Interest Rates – 5% – 10%
Fees – 1.7% for loans up to $150K, 2.25% for higher amounts
Loan Amount – Up to $5M
Terms – Up to 20 years
Interest Rates – 5% – 6%
Fees – Typically 3% of the loan amount
Down Payment – 10% minimum
Loan Amount – Up to $50K
Terms – Up to 6 years
Interest Rates – 8% – 13%
No Fees
Loan Amount – Up to $2M
Terms – Up to 30 years
Interest Rates – 3.75%
work for or own a small business.
✔️ Lowest Interest Rates – Starting at Prime + 2.75%
✔️ Longest Repayment Terms – Up to 25 years
✔️ Flexible Use – Cover almost any business need
✔️ Lengthy Approval Process – Can take 8-12 weeks
✔️ Extensive Paperwork – Requires thorough documentation
✔️ Good Credit Required – Generally 650+ credit score
Get Started Today! Let Tree of Life Funding help you secure the best SBA loan for your business.
You can apply online through our simple one-page form or call us to begin the process. You’ll need to provide the required documents along with your desired loan amount.
SBA loan approvals typically take 3–5 weeks. Once finalized, funds will be deposited into your business account within a few business days.
The approval timeline for an SBA loan depends on where you apply. At Tree of Life Funding, our network of lenders can approve SBA loans in as little as 3-5 weeks. Traditional banks, on the other hand, may take at least three months to process and approve an application. While SBA loans offer numerous advantages, the longer approval process is one of the trade-offs.
Yes, SBA loans are highly competitive due to their favorable terms. Lenders typically require a good to excellent credit score (mid-600s or higher). Unlike other financing options, SBA loans are reserved for established businesses, and the intended use of the funds plays a significant role in the approval process.
The Small Business Administration (SBA) guarantees a portion of the loan, making it easier for small businesses to secure funding. This reduces the lender’s risk and increases approval chances for qualified applicants. SBA-guaranteed loans can be used for various purposes, including:
To qualify, businesses must be for-profit, have good credit, provide sufficient collateral, and meet the SBA’s size standards.
For 7(a) loans exceeding $350,000, the collateral amount may need to match the loan value. Each lender has different collateral requirements, so it’s important to check their policies. Collateral can be seized if loan payments are not made.
SBA loans are not available to borrowers with bad credit. However, if you can provide collateral and meet other financial requirements, you may still qualify with good credit. If you don’t meet SBA loan criteria, other financing options like Working Capital Loans or Business Term Loans can help build your credit over time.
SBA loans are among the most affordable financing options available. However, costs vary based on credit score, loan term, and lender policies. Tree of Life Funding helps businesses access competitive SBA loan rates starting at 5%, compared to the 7% or higher rates many lenders charge.
SBA loan rates typically follow the Prime Rate + a percentage based on the program:
Loan Size | Fees | Notes |
Up to $150K | 2% of the guaranteed portion | Lender retains 25% of the fee |
SBA Express for Veterans (Up to $350K) | No fee | For qualified veterans & spouses |
$150K – $700K | 3% of guaranteed portion | – |
$700K – $5M | 3.5% on the first $1M + 3.75% on the remainder | – |
Short-Term SBA Loans (Up to $5M) | 0.25% of the guaranteed portion | Maturities of 12 months or less |
Up to $150K | 2% of the guaranteed portion | Lender retains 25% of the fee |
SBA loans have several tax considerations, including:
It’s always best to consult a tax professional to understand how an SBA loan could affect your business financially.
At Tree of Life Funding, we simplify the SBA loan process so small businesses can access the capital they need to grow. Contact us today to explore your options and get started!
Let’s start the conversation. Complete the form below, and one of our financial experts will reach out shortly.
© 2025 tree of Life Funding. All rights reserved.