SBA loans vs grants

Loans and repayment

Most 7(a) term loans require monthly principal and interest payments from business cash flow. A fixed rate keeps the interest rate constant; a variable rate can change the payment. An SBA guarantee supports the lender and does not remove the borrower’s repayment obligation. SBA: 7(a) loans. Last checked Oct 25, 2026.

Eligible 7(a) uses include buying, refinancing or improving business real estate; working capital; refinancing business debt; equipment, furniture, fixtures and supplies; and complete or partial changes of ownership. A lender must confirm that the proposed transaction meets program rules. SBA: 7(a) loans. Last checked Oct 25, 2026.

What SBA grants actually fund

SBA says it does not offer general grants to start or expand a business. Its grant-related funding instead has specific purposes, including research and development, exporting and organizations that provide entrepreneurial support. SBA: grants and STEP directory. Last checked Oct 25, 2026.

SBA points research businesses to Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR). These programs support work aligned with federal research objectives and commercial potential; they are not general startup-expense grants. Follow the relevant research opportunity for its applicant rules, award type and application requirements. SBA: grants and STEP directory. Last checked Oct 25, 2026.

STEP awards go to states and territories, which administer export assistance for eligible small businesses. Examples include trade missions, international marketing, translation, export training and trade-show participation. A business starts with its state or territory’s STEP representative, rather than applying for the state’s SBA award. SBA: grants and STEP directory. Last checked Oct 25, 2026.

The Program for Investment in Microentrepreneurs (PRIME) supports organizations that provide training, technical assistance, access-to-capital support and program development for disadvantaged microentrepreneurs. The direct grant recipient is the service organization. SBA’s grantee directory includes a 2026 list; a listing there is not an open application announcement. SBA: how PRIME supports microentrepreneurs; SBA: PRIME grantee directory. Last checked Oct 25, 2026.

• All SBA grant-related programs

Choose the right application route

Apply to a participating lender, which determines the application package for the loan size, processing method and your circumstances. SBA’s program table requires Form 1919 for Standard 7(a), 7(a) Small and SBA Express loans. SBA: 7(a) loans; SBA: types of 7(a) loans. Last checked Oct 25, 2026.

Start with SBA’s CDC directory or a local SBA office. A CDC guides the 504 application and lender financing; discuss the project, its eligibility and the documents required before applying. SBA uses Form 1244 to review 504 eligibility; obtain the current form and required supporting exhibits from your CDC. SBA: 504 loans; SBA: Form 1244 for 504 applications. Last checked Oct 25, 2026.

Apply through an SBA-approved intermediary in your area. The intermediary makes the credit decision and sets the loan terms. Ask it for its document checklist, collateral requirements and an itemized description of any fees; SBA’s borrower overview does not give a universal borrower fee schedule. SBA: microloans. Last checked Oct 25, 2026.

Begin by checking your declaration and applying through the official SBA disaster portal. SBA requires IRS Form 4506-C with each disaster application to authorize release of tax information, including when the applicant is not required to file a federal tax return. Follow the application’s requests for additional records. SBA: disaster recovery; SBA: disaster application tax authorization. Last checked Oct 25, 2026.

Prepare for a lender conversation

Prepare a business plan, requested amount and proposed use of funds, financial projections, credit information and details of possible collateral. SBA also recommends working with a resource partner to organize tax returns and bank statements. The lender supplies the final document checklist. SBA: Lender Match; SBA: financial preparation; SBA: 7(a) loans. Last checked Oct 25, 2026.

SBA’s Lender Match is a free online tool for connecting small businesses with prospective lenders. SBA: Lender Match instructions (PDF). Last checked Oct 25, 2026.

Lender Match is not a loan application and guarantees neither a match nor a loan offer. Personal information submitted there is used to connect you with prospective lenders; participating lenders may also offer conventional loans. SBA: Lender Match. Last checked Oct 25, 2026.

Questions about SBA loans vs grants

Official SBA help

SBA’s Lender Match is a free online tool for connecting small businesses with prospective lenders. SBA: Lender Match instructions (PDF). Last checked Oct 25, 2026.

SBA district offices and resource partners help with business planning and applications. The local-assistance directory includes Small Business Development Centers, SCORE, Women’s Business Centers and Veterans Business Outreach Centers, with free or low-cost counseling and training. SBA: local assistance; SBA: 7(a) loans. Last checked Oct 25, 2026.

Each fact links to the official source checked on the date shown. Confirm the requirements and costs for your application with SBA or the participating lender.