A small business loan is financing extended to a business below SBA size-standard thresholds, spanning several distinct product families — term loans, SBA-guaranteed loans, lines of credit, working capital advances, equipment financing, and invoice factoring — each underwritten differently and priced differently.
Small business loan is an umbrella term, not a single product. The 2026 SMB financing menu spans seven product families: term loans (a lump sum repaid on a fixed schedule), SBA-guaranteed loans (7(a), 504, and microloans, government-backed to reduce lender risk), business lines of credit (revolving, draw-as-needed capital), working capital products including merchant cash advances (an advance against future receivables), equipment financing (secured by the equipment itself), invoice factoring (selling unpaid invoices for immediate cash), and alternative capital sources. Each is underwritten against different signals — cash flow, collateral, time in business, personal and business credit — and priced accordingly. Pricing varies widely by product. SBA 7(a) loans cap at $5M and typically price in the prime + 2.25-4.75% range because the government guarantee reduces the lender's risk. Non-bank term loans commonly run 18-35% APR. Merchant cash advances run roughly 25-55% APR-equivalent depending on the factor rate and repayment term. A business's NAICS code and revenue determine whether it even qualifies as 'small' for SBA size-standard purposes, which gates eligibility for the lowest-cost, government-backed programs. Qualification factors common across most products include time in business (most lenders want 6 months to 2+ years), personal and/or business credit score, monthly or annual revenue, and existing debt load. Businesses that qualify for SBA financing generally get the lowest rates; businesses that don't (newer businesses, thinner credit files, urgent timelines) typically end up in the non-bank term loan or working-capital/MCA tier, which trades a higher cost of capital for faster funding and looser qualification. The product-selection decision should be driven by timeline, credit/financial strength, and cash-flow cadence — not by which option has the smallest headline payment. A factor-rate quote from an MCA is not directly comparable to an APR quote from a term loan without converting both to the same all-in cost basis.
A small business loan is underwritten against the business — its revenue, cash flow, time in business, and often the owner's personal guarantee — and typically reports to business credit. A personal loan is underwritten entirely against the individual borrower's personal credit and income and reports only to personal credit, regardless of how the funds are used. Lenders generally prefer a purpose-built business product once a business has enough operating history to qualify.
It depends entirely on the product. SBA and bank term loans typically want a 660+ personal credit score alongside strong business financials. Non-bank term loans and lines of credit are often available down to the 600-640 range. Working capital products and merchant cash advances can approve well below that, weighting recent revenue and bank-statement cash flow more heavily than credit score.
It varies by product and lender: SBA 7(a) loans cap at $5M; SBA microloans cap at $50,000; non-bank term loans and working capital products typically range from a few thousand dollars up to $500K+ depending on revenue and underwriting. The realistic amount for any given business is driven by monthly/annual revenue, existing debt load, and the specific product's underwriting model, not a single universal cap.
Funding speed is inversely related to how favorable the pricing is. SBA loans typically take several weeks to a few months due to government-guarantee paperwork. Bank term loans take 1-3 weeks. Non-bank term loans and lines of credit often fund in 1-5 business days. Merchant cash advances and some working capital products can fund same-day to next-day, which is part of why they carry the highest cost of capital.