SBA Loan Limits by Program
Standard 7(a): $5,000,000. 7(a) Small: $350,000 per project. SBA Express: $500,000. 504 debenture: $5,000,000 per business, or $5,500,000 per project for small manufacturers and eligible energy projects. The SBA's guaranty tops out at $3,750,000.
The SBA runs two main loan programs. A 7(a) loan is the general-purpose one. It can pay for a business purchase, working capital, equipment or real estate. A 504 loan finances buildings and long-life equipment through a Certified Development Company, or CDC, which is a nonprofit lender that works alongside your bank.
Each program, and each version of 7(a), has its own ceiling in SOP 50 10 8.1, the SBA's rulebook for lenders.[1] If you own other businesses with common control (the SBA calls them affiliates), the limits apply to all of them together as one business.
SBA Loan Limits Under SOP 50 10 8.1 (effective October 1, 2026)
| Program | Maximum | How it is counted |
|---|---|---|
| Standard 7(a) | $5,000,000 | Per loan |
| 7(a) Small | $350,000 | Per project, counting other 7(a) loans made within 90 days |
| SBA Express | $500,000 | Total outstanding Express loans, counting affiliates |
| SBA guaranty (all 7(a) versions) | $3,750,000 | Per business, counting affiliates and existing SBA loans |
| 504 debenture | $5,000,000 | Total outstanding 504 debentures per business, counting affiliates |
| 504: small manufacturer or eligible energy project | $5,500,000 | Per project |
| 504 debenture minimum | $25,000 | Per debenture |
Source: SBA SOP 50 10 8.1 and SBA Policy Notice 5000-879058. 13 CFR 120.151 sets the guaranty limit.
For detailed calculations and real examples, see the FUNDED Series.
The guaranty is the share of your loan the SBA promises to repay the lender if you default. It is 85% on loans of $150,000 or less, 75% above that, and 50% on SBA Express.[2] A maxed-out $5,000,000 7(a) at 75% uses the whole $3,750,000 guaranty cap, and 7(a) Small and SBA Express guaranties count toward that same cap.
On a 504 project, the $5,000,000 limit covers only the CDC's share. In the usual structure, a bank lends 50% or more, the CDC lends up to 40%, and you put in at least 10%. The bank's loan sits beside the debenture, so a 504 project can be well over $5,000,000 in total.
What Sizes Your Loan: Four Tests
Your loan is the smallest number that passes every test: cash flow coverage, the business valuation (on a purchase), your equity, and the lender's view of collateral. For most borrowers, cash flow is the one that binds.
The program cap tells you the most anyone can borrow. It says nothing about you. A lender sizes your loan by working through its tests one at a time, and whichever one produces the lowest number wins.
That is good news in one way. Each test points to a choice you can make, such as the price you offer, the equity you bring, or how a seller note is structured. The sections below take them in order.
Test 1: Cash Flow Coverage
When you purchase a business as a first-time owner, the business must show at least $1.25 of cash flow for every $1.00 of yearly loan payments, based on its last full year or two-year average. Projections can't carry a purchase over the line.
Lenders call this the debt service coverage ratio, or DSC. "Debt service" means all the principal and interest the business will owe in a year, including the new SBA loan and any other business debt. Cash flow here starts from EBITDA, which is earnings before interest, taxes, depreciation and amortization.
The minimum depends on what the loan is for.[3]
Minimum Debt Service Coverage Under SOP 50 10 8.1
| Loan purpose | Minimum DSC | What it is measured on |
|---|---|---|
| Purchase: Initial Acquisition (new owner, the default) | 1.25 | Last fiscal year or 2-year average, historical or adjusted |
| Purchase: Owner Buyout | 1.25 | Same |
| Purchase: Business Expansion (your existing business purchases 100% of the ownership interest in a business in the same four-digit NAICS group) | 1.15 | Same |
| Standard 7(a), not a purchase | 1.15 | Historical and/or projected |
| 7(a) Small, not a purchase | 1.10 | Historical or projected |
| 504 | 1.15 | Last fiscal year or 2-year average |
| Global (business plus owners) | 1.00 | All income and obligations together |
Source: SBA SOP 50 10 8.1. 7(a) Small and SBA Express purchases use the same 1.25 or 1.15 as Standard 7(a).
For detailed calculations and real examples, see the FUNDED Series.
Smaller programs do not loosen the rule on a purchase. The SOP says no reduced DSC applies just because a loan is 7(a) Small or SBA Express.
There is also a household-level check, called global cash flow. It adds your personal income and obligations to the business and must come out at 1:1 or better. The global DSCR guide walks through it.
A Worked Example: $200,000 of Cash Flow
A business with $200,000 of yearly cash flow can support about $160,000 a year of loan payments at 1.25. At an illustrative 10% rate over 10 years, that is a loan of about $1,009,000, far below the $5 million cap.
Say you want to purchase a business whose cash flow, after a fair salary for the person running it, was $200,000 last year. It has no other debt, and the seller is not carrying a note. You are a first-time owner, so the floor is 1.25.
Step 1: the payment it can carry. Divide $200,000 by 1.25. That gives $160,000 a year, or about $13,333 a month, of total loan payments.
Step 2: the loan that payment repays. A business purchase loan is paid off over 10 years at most. For the rate, I'll use 10.00%, the SBA's maximum variable rate on loans over $350,000 when prime was 7.00% on October 19, 2026.[4] At that rate, $13,333 a month for 120 months pays off about $1,009,000.
Step 3: the project it fits. The total project is everything needed to close and operate. If the loan covers 90% of it and you bring the required 10%, the project can be about $1,121,000, with about $112,000 from you.
Now say the same deal were a Business Expansion. That means a business you have owned for at least two full fiscal years purchases 100% of the ownership interest in another business in the same four-digit NAICS industry group. The floor drops to 1.15, and the same cash flow supports about $1,097,000. An asset purchase stays an Initial Acquisition, even when an existing business is the buyer.
Read the last bar slowly. To borrow the full $5,000,000 for a purchase at this rate, the business needs about $991,000 a year of cash flow. A lower rate stretches every number above a little. Many lenders quote a rate below that cap, and you can check your own figures in the free SBA loan calculator.
Free: The 27-Point SBA Loan Checklist
See every number a lender checks before it sizes your loan, so you know your limit before you make an offer.
✓ You're in!
Your 27-point SBA loan checklist is downloading now, check your downloads folder. We've also added you to the list for SBA updates from Hartwell Labs.
Enter your email and we'll send you the free 27-point checklist instantly.
Enter your email and we'll send you the free 27-point checklist instantly.
No spam. Unsubscribe anytime. We'll also notify you of new book editions.
Test 2: The Business Valuation Caps Total Debt
In a purchase, all the debt behind the deal, including a seller note that takes payments, is limited to the business valuation. If you pay more than the valuation, the difference comes from your equity.
When you purchase a business with a 7(a) loan, the lender gets a business valuation. SOP 50 10 8.1 says the total debt eligible to support the deal is limited to that valuation and must also pass the cash flow test.[5] Seller debt counts in that total unless it is on full standby, meaning the seller takes no payments for the life of the SBA loan.
Go back to the example. Cash flow supports a $1,121,000 project. Suppose the valuation comes in at $1,000,000. Total debt can be no more than $1,000,000, and the extra $121,000 of price has to be paid in equity.
This is where your choices show up. You can negotiate the price toward the valuation, bring more cash, or ask the seller to put part of the price on full standby. The max purchase price calculator runs the cash flow side of that math.
Test 3: Your 10% Equity Injection
A first-time purchase needs at least 10% of the total project cost from you, and that minimum cannot be reduced or eliminated. Your loan can't be bigger than the project minus your equity.
The equity injection is the SBA's name for your down payment. On an Initial Acquisition it is 10% of everything needed to close and operate, and the SOP says it cannot be reduced.[6] So the cash you have can set your ceiling just as firmly as cash flow does. With $80,000 to put in, a purchase project tops out near $800,000.
Equity also works in your favor on the cash flow test. If the coverage comes up short, the SOP lets you contribute more equity to shrink the loan and its payments. The SBA down payment guide covers what counts toward the 10% and the limits on seller notes.
Test 4: Collateral, Without the Automatic No
SOP 50 10 8.1 says a loan must not be declined solely because collateral is inadequate. On a Standard 7(a) over $350,000 or a business purchase, a shortfall means the lender must take available equity in personal real estate you solely own, unless that equity is under 25% of the property's value.
Collateral rarely sets the loan amount on its own. The SBA wants lenders to take liens on all available business fixed assets, valued at a discount, up to the loan amount. That is the SOP's definition of "fully secured."
On a Standard 7(a) over $350,000 or a business purchase, if the business assets fall short, which is common when most of the price is goodwill, the lender must take available equity in personal real estate solely owned by each 20%-or-more owner and guarantor. When that equity is less than 25% of the property's fair market value, it isn't required.[7] Property you own jointly with a spouse is something the lender must consider, but it is not a required lien.
The SOP also says the SBA guaranty is no substitute for available collateral. A thin collateral position can still weigh on how a lender sees the whole deal, and each lender weighs it differently. The SBA collateral guide lists the discount applied to each type of asset.
Did the SBA Raise the Limit to $10 Million?
Not for any one loan. The 7(a) limit is still $5,000,000 and the 504 limit is still $5,000,000. What changed is that a 7(a) balance no longer reduces the 504 limit, so one business can use both programs at full size.
You may have seen the claim that the SBA doubled its loan limit to $10 million. It points at a real change, so it's an easy one to repeat. The details are worth knowing if you are planning a large deal.
Under the old rule, SOP 50 10 8, SBA guaranties from 7(a) loans counted against the 504 limit. A business with a large 7(a) loan had little 504 room left. SBA Policy Notice 5000-879058, effective July 4, 2026, changed that. It says a 7(a) balance, up to the 7(a) maximum, does not reduce the maximum available under 504, and that a lender may approve a 7(a) loan first and a 504 second.[8] SOP 50 10 8.1 now carries the same rule: only 504 loans count toward the 504 limit.
So a business could, for example, use a 7(a) for goodwill, working capital and equipment, and a 504 for its building. Each loan still has to pass its own tests, and the SOP says the 7(a) should be processed and approved first. The SOP gives statutory requirements as the reason for that order. Separately, the SBA's $3,750,000 guaranty cap counts existing 7(a) and 504 loans when the 7(a) is sized.
The 7(a) vs 504 comparison covers which assets fit each program and how a combined structure is put together.
What SBA Loans Look Like in Practice
In SBA's public loan data from fiscal 2015 through June 30, 2026, the median 7(a) loan was $150,000. Loans of $2 million to $5 million were 5.7% of 7(a) loans. Business purchase loans ran larger, with a median of $651,000 since fiscal 2019.
The SBA publishes every approved 7(a) and 504 loan in its FOIA data files.[9] Our count of all industries, approved and not cancelled, shows how far most loans sit below the cap.
On the 504 side, the median debenture over the same years was $579,000, and the median total financing including the bank's loan was $1,313,000. A typical number tells you what other borrowers did. Your own number still comes from the four tests above.
Your Choices If the Number Comes Up Short
When the loan you qualify for is smaller than the deal, you can lower the price, add equity, restructure seller debt, or put real estate on a longer term. Each choice moves a different test.
Lower the price. A lower price shrinks the loan, the payment and the gap over the valuation all at once. It is often the most effective lever you have.
Bring more equity. Extra cash reduces the loan and its payments, which the SOP names as the fix for a coverage shortfall. It costs you liquidity, so keep enough in reserve to run the business.
Restructure the seller note. A seller note that takes payments counts in your debt service, and an interest-only note is tested as if it were paid off over 10 years. A note on full standby takes no payments for the life of the SBA loan, so it stays out of the payment math. Not every seller will agree to that.
Put real estate on a longer term. In a purchase, only the real estate portion can stretch past 10 years, up to 25. A longer term on the building lowers the yearly payment, which can raise what the deal supports. Your lender decides whether one blended loan or a separate 504 loan for the building fits better.
How to Estimate How Much SBA Loan You Can Get
- 1
Pick the right program cap
Standard 7(a) up to $5,000,000, 7(a) Small up to $350,000, SBA Express up to $500,000, or a 504 debenture up to $5,000,000. This is your ceiling, not your number.
- 2
Find the cash flow
Use the business's last full fiscal year, or the average of the last two, starting from EBITDA. For a purchase, projections can't be used to meet the minimum.
- 3
Divide by the DSC floor
1.25 for a first-time purchase or an Owner Buyout, 1.15 for a Business Expansion (purchasing 100% of the ownership interest in a business in the same four-digit NAICS group) or a Standard 7(a) that is not a purchase. The result is the most you can pay each year on all business debt.
- 4
Subtract other debt payments
Take out payments on existing business debt and any seller note that is not on full standby. What remains is room for the SBA loan payment.
- 5
Turn the payment into a loan amount
Use the term your loan allows (10 years for a business purchase, up to 25 for real estate) and a realistic rate in the SBA loan calculator.
- 6
Check the valuation and your equity
In a purchase, total debt can't exceed the business valuation. A first-time purchase needs at least 10% of the total project cost, and that can't be waived; on a Business Expansion or Owner Buyout, your lender may reduce or waive it if the business has enough liquidity. The smallest result across all of these is your likely loan.
- 7
Confirm with a lender
Lenders apply their own policies on top of the SBA minimums, so treat your estimate as a starting point for the conversation.
Want the full walkthrough, with real deals worked step by step?
Get the FUNDED SeriesRelated SBA Lending Guides
- SBA 7(a) vs 504, which program fits your project and how to use both
- Global DSCR for SBA Loans, the household cash flow test your payment has to pass
- SBA Loan Down Payment, how much you put down and what counts
- SBA Collateral Requirements, what "fully secured" means and what happens when you aren't
- SBA Max Purchase Price Calculator, the most a business's cash flow can support
- SBA Loan Calculator, the payment on any loan amount, rate and term
- SBA Loan Rates, the maximum rates by loan size