Our Guide to SBA Loan Down Payments - FF Blog
Our Guide to SBA Loan Down Payments
December 30, 2021
9. Our Guide to SBA Loan Down Payments-09

Our Guide to SBA Loan Down Payments

Small Business Administration (SBA) loans are immensely popular and for good reason; their favorable terms, long loan periods, large loan amounts, and affordability make them very useful. Entrepreneurs use SBA loans for a wide variety of investments in pursuit of future growth.

As with many other types of loans, SBA loans often have a down payment requirement. The only two SBA loans that don’t require down payments are CAPLines and Disaster loans. All the other SBA loans require a down payment of 10 to 50 percent.

If you’re considering an SBA loan, it’s smart to understand what your down payment could be prior to applying.

To that end, in this post, we’ll first review what an SBA loan down payment is. Then, we’ll explain what you need to know about the down payment requirements of each SBA loan.

What is an SBA Loan Down Payment?

An SBA loan down payment is the upfront money you pay to a lender as a condition of your loan approval. SBA loan down payments are like any other except that lenders generally require lower down payments on SBA loans compared to other similar, non-SBA loans.

As you may know, there are many different types of SBA loan programs: 504 loans, 7(a) loans, Microloans, and more. Each of these programs has different purposes and down payment requirements, as shown below:

SBA 504 Loans

504 loans are meant to help entrepreneurs purchase or renovate commercial real estate or equipment to grow their business. Therefore, 504 loan down payments will be based on the price of your equipment or real estate.

Do you need a down payment for an SBA loan in the 7(a) program?

SBA 504 loans require a down payment, but they tend to have one of the lowest down payment requirements at a minimum of 10 percent.

In some cases, it’s possible to pay even less than 10 percent down if you line up a local government that’s willing to contribute financing. Yet even at ten percent down, on a million-dollar project, that would mean about $100,000 in upfront cash savings compared to traditional loans. Most traditional lenders require 20 to 30 percent of the purchase price as a down payment.

Just keep in mind that, in some cases, 504 loan down payments may exceed 10 percent. It will depend on the strength of your small business loan application. If your financials and business plan are sound, you’ll be more likely to get the lower business loan down payment requirement.

SBA 7(a) Loan Program

The SBA 7(a) loan program is the SBA’s flagship program. These loans provide financing for a variety of business needs: working capital, inventory, start-up financing, real estate purchases, and more.

Do you need a down payment for an SBA loan in the 7(a) program?

SBA 7(a) down payment requirements are generally more strict compared to 504 loans but also range from 10 to 30 percent.

With an SBA 7(a) loan, the SBA guarantees between 10 and 30 percent of the loan amount; that guarantee allows SBA lenders to offer certain borrowers lower down payment requirements. However, there are multiple types of 7(a) loans, and they have various down payment requirements.

Here’s a list of the 7(a) loans and their minimum down payment requirements:

  • Standard 7(a) and 7(a) Small Loans: 15 percent for loans up to $150,000 and 25 percent for loans greater than $150,000.
  • SBA Express: 50 percent for loans up to $500,000
  • Export Express: 10 percent for loans up to $350,000 and 25 percent for loans over $350,000.
  • Export Working Capital and International Trade: 10 percent for loans up to $500,000.


The microloan program, as the name suggests, provides small loans of up to $50,000. Borrowers can use their microloan funds for working capital, machinery, furniture, inventory, and more. You can use this page to find a microlender near you.

Learn more about the SBA Microloan program.

Do you need a down payment for an SBA loan in the Microloan program?

You do need a down payment for SBA microloans. Since down payment requirements are 20 to 30 percent, and working capital loan amounts average $10,000, microloan borrowers usually need to put $2000 to $3000 down.

Conclusion: Tighten Your Budget for SBA Loan Down Payments

Unless you’re applying for a CAPLine or Disaster loan from the SBA, you can expect to pay a down payment on SBA loans. If you’re not prepared to make a SBA down payment, you’re not prepared to apply for an SBA loan. So if you’re considering an SBA loan with a down payment, start preparing now.

Consistently setting aside excess cash each month will help you raise the money to pay for an SBA loan. If you need help tightening up your budget to allow for savings, check out these budgeting tips.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].