The Quick Answer
If you're buying a building or heavy equipment, go with SBA 504. If you need working capital, want to buy a business, or need flexibility in how you use the funds, go with SBA 7(a). Need it faster? SBA Express. Small amount with quick turnaround? SBA Bolt.
That's the 30-second version. But picking the right SBA program can save (or cost) you tens of thousands of dollars. So let's break down all four programs with real numbers.
Why this matters: Most articles only compare 7(a) vs 504. But there are four SBA programs, and picking the wrong one means you either overpay, wait longer than you need to, or get denied when a different program would have approved you.
The Four SBA Programs Explained
SBA 7(a) - The All-Purpose Loan
The 7(a) is the most popular SBA program and the most flexible. You can use it for almost anything: working capital, equipment, real estate, buying a business, refinancing debt, or inventory.
- Max amount: $5 million
- Rates: Variable, tiered by loan size. Prime + 3.0% for loans over $350K up to Prime + 6.5% for loans under $50K (currently ~10.5-14.0%)
- Terms: Up to 10 years for working capital, 25 years for real estate
- Down payment: 10% (as of June 2025 SOP changes)
- Timeline: 60-90 days
- SBA guarantee: 85% for loans up to $150K, 75% for larger
Best for: Business owners who need flexibility. Working capital, buying an existing business, refinancing expensive debt, or any situation where you need the money for more than one purpose.
SBA 504 - The Real Estate & Equipment Specialist
The 504 is built for one thing: fixed assets. It has a unique three-party structure - a bank covers 50%, a Certified Development Company (CDC) covers 40%, and you put down 10%. The CDC portion carries a below-market fixed rate, which is why 504 usually beats 7(a) on price for real estate deals.
- Max amount: $5.5 million (CDC portion)
- Rates: Fixed on CDC portion (below market), bank portion varies
- Terms: 10 years for equipment, 20-25 years for real estate
- Down payment: 10-20% (varies by project type and business age)
- Timeline: 75-120 days
- Use restrictions: Real estate and heavy equipment only - no working capital
Best for: Buying commercial property, building out a new location, or purchasing major equipment ($100K+). If your primary need is a building, this is almost always the better deal.
SBA Express - The Fast Track
Same program as 7(a) but with a streamlined process. The trade-off: lower maximum amount and a smaller SBA guarantee (which means the lender takes more risk, so rates may be slightly higher).
- Max amount: $350,000
- Rates: Variable, Prime + 4.5% to 6.5%
- Terms: Same as 7(a)
- Timeline: 3-6 weeks
- SBA guarantee: 50%
Best for: Business owners who need SBA-level terms but can't wait 3+ months. Great answer to the "SBA takes too long" objection.
SBA Bolt - The Newest Option
Bolt is the SBA's newest program, designed for speed with technology-driven underwriting. It's similar to Express but targets smaller, simpler deals.
- Max amount: $150,000
- Rates: Variable, similar to Express
- Terms: Same as 7(a)
- Timeline: 3-6 weeks
- SBA guarantee: 50%
Best for: Straightforward deals under $150K where you want SBA terms with a faster process.
Full Side-by-Side Comparison
Here's every SBA program in one table. This is what most comparison articles don't show you - all four programs at once.
| Feature | 7(a) Standard | 504 | Express | Bolt |
|---|---|---|---|---|
| Max Amount | $5 million | $5.5 million (CDC) | $350,000 | $150,000 |
| Interest Rate | Prime + 3.0-6.5% (variable, tiered by loan size) | Fixed (CDC) + variable (bank) | Prime + 4.5-6.5% (variable) | Prime + 4.5-6.5% (variable) |
| Repayment Terms | 7-25 years | 10-25 years | 7-25 years | 7-25 years |
| Down Payment | 10% | 10-20% | 10% | 10% |
| SBA Guarantee | 75-85% | 40% (CDC portion) | 50% | 50% |
| Approval Timeline | 60-90 days | 75-120 days | 3-6 weeks | 3-6 weeks |
| Use of Funds | Almost anything | Real estate & equipment only | Almost anything | Almost anything |
| Working Capital | Yes | No | Yes | Yes |
| Buy a Business | Yes | No | Yes | Yes |
| Best For | Flexible needs, larger deals | Property & heavy equipment | Speed + SBA rates | Smaller, simpler deals |
Key Takeaway
The program you need depends on three things:
- What you're using the money for - real estate narrows it to 504 or 7(a). Working capital eliminates 504.
- How much you need - over $350K eliminates Express, over $150K eliminates Bolt.
- How fast you need it - under 45 days eliminates standard 7(a) and 504.
Real Cost Comparison: $500K Loan
Numbers make the difference clear. Here's what a $500,000 SBA loan actually costs under each program (assuming current rates).
| Cost Factor | 7(a) Standard | 504 | Express |
|---|---|---|---|
| Interest Rate | ~10.75% (variable) | ~9.25% (blended) | ~12.5% (variable) |
| Monthly Payment (25-yr) | ~$4,830 | ~$4,240 | ~$5,420 |
| Total Interest (25 yr) | ~$949,000 | ~$772,000 | ~$1,126,000 |
| SBA Guarantee Fee | ~$14,500 | ~$6,750 | ~$14,500 |
| Approval Speed | 60-90 days | 75-120 days | 30-45 days |
The aha moment: On a $500K real estate loan, the 504 program saves you roughly $590/month compared to 7(a). That's $7,080/year - or $177,000 over the life of the loan. If you're buying property and you go with 7(a) because nobody told you about 504, that's an expensive mistake.
Pro Tip: Don't just compare interest rates - compare total cost of borrowing. The 504's guarantee fee is typically lower, and the fixed rate on the CDC portion protects you from rate hikes. A variable 7(a) rate that looks fine today could cost significantly more if prime goes up.
Which SBA Program Is Right for You?
Answer these three questions and you'll know which program to apply for.
Question 1: What are you using the money for?
- Buying a building or major equipment? → Start with 504. If you also need working capital, add a 7(a).
- Working capital, inventory, or debt refinancing? → 7(a) or Express. 504 can't help here.
- Buying an existing business? → 7(a) only. No other SBA program covers acquisitions.
- Multiple purposes? → 7(a) for flexibility, or combine programs (see below).
Question 2: How much do you need?
- Under $500K? → All four programs are options. Express or Bolt give you speed.
- $500K-$5M? → 7(a) or 504 depending on use of funds.
- Over $5M? → 504 can go to $5.5M on the CDC portion (total project can be much larger). For amounts beyond SBA limits, you'll need conventional commercial financing.
Question 3: How fast do you need it?
- Under 45 days? → Express or Bolt. Standard 7(a) and 504 can't move that fast.
- 60-90 days? → Standard 7(a) works.
- No rush - best deal possible? → 504 for real estate. The extra time is worth the savings.
Decision Framework Summary
- Buying property? → 504 (best rate) unless you also need working capital bundled in
- Need flexibility? → 7(a) (does almost everything)
- Need speed? → Express or Bolt (30-45 days)
- Buying a business? → 7(a) (only option)
- Under $500K and straightforward? → Bolt or Express
- Big real estate deal? → 504 every time
Can You Combine SBA Programs?
Yes. And this is a strategy most business owners don't know about.
The most common combination: 504 for real estate + 7(a) for working capital. You get the best rate on your property and still have capital to run the business. It requires more paperwork and coordination, but it's doable.
For example: You're buying a $1.2M building and need $200K for renovations and working capital. Use a 504 for the building (lower rate, fixed) and a 7(a) for the rest (flexible use). Total SBA exposure stays within limits.
Pro Tip: Combining programs is where a broker earns their value. Packaging two SBA applications simultaneously requires knowing which lenders work with which CDCs, how to structure the deal so both approvals align, and how to present a clean file that doesn't slow either one down. Most business owners trying this on their own hit walls they don't see coming.
When SBA Is the Wrong Choice
SBA loans are the best deal in business lending. But they're not for everyone.
SBA is probably wrong for you if:
- You need money in under 2 weeks. Even Express takes 30-45 days. If you're behind on payroll or about to lose a deal, an MCA or term loan gets you funded in days, not weeks.
- Your credit is below 640. No SBA program will approve you. Consider a revenue-based option while you rebuild.
- You've defaulted on a government-backed loan that resulted in an unresolved loss to the government. If the prior loss has been fully repaid, you may still be eligible.
- Your business is under 2 years old with no revenue track record. SBA lenders want to see established cash flow. For startups with strong credit, credit stacking may be a better first step.
- You need a small amount fast. Going through 60-90 days of SBA paperwork for a $50K loan doesn't always make sense. A line of credit gets you similar money in a fraction of the time.
The honest truth: SBA saves you the most money over time. But "cheapest" doesn't always mean "best." If you miss a growth opportunity because you waited 3 months for SBA approval, the savings don't matter. Sometimes the right move is a faster, more expensive product now - then refinance into SBA later when the urgency passes.
Frequently Asked Questions
What is the main difference between SBA 7(a) and 504 loans?
The biggest difference is what you can use the money for. SBA 7(a) is flexible - working capital, equipment, inventory, debt refinancing, or buying a business. SBA 504 is specifically for buying real estate or heavy equipment. If you need money for day-to-day operations, 7(a) is your program. If you're buying a building, 504 usually gets you a better deal.
Which SBA loan has lower interest rates - 7(a) or 504?
SBA 504 typically has lower rates because the CDC portion (40% of the loan) carries a fixed below-market rate. The 7(a) rate is variable, tiered by loan size from Prime + 3.0% (loans over $350K) to Prime + 6.5% (loans under $50K). The 504 blended rate often comes in 0.5-1.5% lower. But 504 is only for real estate and heavy equipment - you can't get a 504 for working capital.
Can I use an SBA 7(a) loan to buy real estate?
Yes. SBA 7(a) loans can be used for commercial real estate. But if real estate is your primary need, the 504 program usually offers better rates and longer terms. The one scenario where 7(a) wins for real estate: when you also need working capital bundled into the same loan.
What is an SBA Express loan and when should I use it?
SBA Express is the fast-track version of the 7(a) program. Maximum amount is $350,000, and the SBA guarantees 50% (vs 75-85% for standard 7(a)). The turnaround is 3-6 weeks vs 60-90+ days for standard 7(a). Use Express when you need SBA-level terms but can't wait 3+ months. The trade-off: slightly higher rates and lower maximum amounts.
How much down payment do SBA loans require?
As of the June 2025 SOP changes, the standard down payment is 10% for both 7(a) and 504. Some situations require more - partner buyouts, special-purpose properties, or businesses with less than 2 years of history may need 15-20%. But 10% is the baseline, significantly less than conventional loans at 20-30%.
Can I combine SBA loan programs?
Yes. You can use a 504 for real estate and a separate 7(a) for working capital. This gives you the best rate on your property while covering operational needs. It requires more paperwork and coordination, but a good broker can package both applications together.
What credit score do I need for an SBA loan?
The minimum is generally 640 for any SBA program, but 690+ is preferred. SBA Express may accept slightly lower scores since the guarantee is smaller. Your FICO is just one factor alongside time in business, revenue, and debt service coverage ratio. Read our full guide to SBA loan requirements.
How long does it take to get each type of SBA loan?
SBA Express: 3-6 weeks. SBA Bolt: 3-6 weeks. Standard 7(a): 60-90 days. SBA 504: 75-120 days. The 504 takes longer because it involves three parties. Timeline also depends on how fast you provide documents and how clean your file is. A disorganized application can add weeks to any program.
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