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SBA Loans Under $500k

Written by Live Oak Bank

SBA Loans Under $500K

With Live Oak, you get a partner who believes in your success, and is willing to take the journey alongside you. We provide small business loans tailored to your goals.

Recently, the U.S. Small Business Administration (SBA) made changes in their rules that make it easier and faster to get a business loan when you need less than $500,000. In 2023, the Small Business Administration released a new Standard Operating Procedure, which is the set of rules banks use to originate and underwrite loans. The update had significant changes to the flagship 7(a) and 504 lending programs. The SBA has reduced certain barriers that could’ve held up loans in the past, like collateral requirements and equity injection. In simple terms, more small business owners will be able to qualify for SBA loans – beneficial for small business owners who are in growth-mode.



Let’s get into these game-changing updates from the SBA.

  • Streamlined loan process and documentation. For loans under $500,000, the SBA has reduced the paperwork load to prove your creditworthiness. This saves both the borrower and the bank time by cutting out several steps in the lending process, meaning you get your money faster.
  • No SBA fees for loans under $1 million. Getting rid of these fees will save you a significant amount of money. On a $500,000 loan, you’ll see over $10,000 in savings. Pretty amazing, right?
  • For loans under $500k, SBA rules go from prescriptive to general bank policy. In other words, the SBA is empowering the lenders to apply their rules of conventional lending to SBA lending. This means removing collateral requirements – so you don’t have to secure your loan with your personal home.
  • Relaxed equity injection requirements. If you are buying a second location, there is no equity injection required. If you’re buying a business, you still need to put down 10% of equity, but the SBA has relaxed its rules around what qualifies as equity. Sure, it could be 10% cash but it could also be 10% seller financing.
  • Refinancing debt is now simpler. The SBA has updated its rules around refinancing, making it easier and faster to refinance business loan debt.

Explore our complete guide to the new SBA changes here and learn more about small business loans from Live Oak here.

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