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What is the average small business loan amount?

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According to the Federal Reserve’s 2017 data for commercial and industrial loans, the average amount for a small business loan is $663,000. However, if you are seeking a small business loan, there are other factors to consider, such as eligibility requirements, repayment terms, and alternative lending sources.

Here is a detailed analysis of the average amounts for small business loans that can assist you in selecting the most suitable one for your business.

Average SBA loan amounts

SBA loans are loans offered by private lenders and backed by the government with low-interest rates through the Small Business Administration. Although SBA loan rates are lower than the average small business interest rates, your credit score, finances, and time in business are other crucial factors that affect the interest rate you will be charged, as with all business loans.

Here are SBA loan types with average loan amount and maximum loan amount in 2022:

Standard 7(a)This funding option can be utilized for various purposes such as working capital, payroll, expansion, and equipment. The funding amount is $999,210, and the maximum available amount is $5 million.

Express Can be used for various purposes, including managing both short and long-term working capital, buying inventory, financing construction projects, renovating facilities, and purchasing real estate. The amount needed is $97,097, and our total funding requirement is $500,000.

Export Express This financing can cover various expenses related to foreign trade, such as participating in trade shows, financing export orders and expansions, acquiring real estate, purchasing equipment, and managing inventory. The available amount is between $275,424 and $500,000.

504 Offers funding for fixed assets that can facilitate the growth of businesses and create new employment opportunities. The funding ranges from $972,506 on average up to a maximum of $5 million to $5.5 million.

CAPLines This funding helps cover the additional costs that come with seasonal changes, such as increased inventory or labor. It can also cover the costs of labor and materials for specific projects. The funding amount ranges from $1,025,408 to $5 million.

Community Advantage This program aims to help small businesses in underserved areas, offering loans between $177,387 and $350,000. These loans can be used for various purposes, such as real estate, equipment purchases, working capital, and more. They are similar to 7(a) loans.

Average small business loan amount by lender

The amount you can borrow for business loans depends on the lender and the type of loan. On average, large national and foreign banks offer higher loan amounts than smaller regional banks. For example, large national banks offer an average of $593,000, while regional banks offer around $146,000. US branches of foreign banks offer the highest average loan amount at $8,512,000.

What are alternative lenders?

Alternative lenders, also called online or fintech lenders, are nontraditional finance firms that offer various business loans similar to those of conventional banks and credit unions. However, alternative lenders may also provide alternative lending solutions, such as merchant cash advances, with faster approval and funding within a few minutes to a few days. It is recommended to explore alternative lenders to determine if they are a good fit but consider the advantages and disadvantages before making a decision.

Where to find business loans

If you need a small business loan, there are many lending options available. The following are some of the most commonly used types of small business lenders and their loan offerings.

  • Online lenders: This lender provides both traditional and nontraditional loan options, including microloans, term loans, business lines of credit, and merchant cash advances. It may be a suitable choice if you need business financing but have a low credit score.
  • Traditional banks: We provide various traditional financing options, including term loans, lines of credit, equipment loans, and commercial real estate loans.
  • SBA lenders: We provide various types of SBA loans, including 7(a) loans, 504 loans, microloans, Express loans, and CAPLines. To help you find the most suitable lender, you can use the SBA’s Lender Match program.

Bottom line

To find the most affordable small business loan, compare interest rates, repayment terms, loan amounts, eligibility criteria, and fees of different types of loans and lenders. Keep in mind that the average loan amount can vary depending on these factors. A business loan calculator can be helpful in determining the best loan for you.

Frequently asked questions

What is the typical small business loan amount?

According to the Federal Reserve’s most recent data from 2017, small businesses typically receive an average loan amount of approximately $663,000.

What is the most you can borrow in a small business loan?

The maximum amount you can borrow for small business loans varies depending on several factors, such as the lender, loan type, and credit history. If you’re considering the SBA 7(a) loan program, the most you can borrow is $5 million.

What is the minimum SBA loan size?

The SBA 7(a) loans do not have a specific minimum amount, but in 2022, the average approved amount for all 7(a) loans, including those under $50,000, was $29,282.

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