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Due to the federal government shutdown that began on October 1, 2025, SBA lending operations may be delayed. Some loan approvals, disbursements and program processing could be paused, affecting businesses waiting for SBA-backed funding. If your business needs capital quickly, consider exploring alternative financing options that are not dependent on federal operations.
If you’ve looked into SBA loans, you probably know they can be tough to qualify for and slow to fund. The good news is you have plenty of other financing options. We’ll walk through the best SBA loan alternatives, who they work best for and what to watch out for. We’ll also compare them side by side so you can find the right fit for your business.
Why look beyond SBA loans?
SBA loans are popular because of their lower rates and long repayment terms. But many small businesses run into challenges:
- A long approval process that can take weeks or months
- Strict requirements around time in business and credit history
- Heavy paperwork and documentation
- Government shutdowns
If your business needs faster funding or doesn’t meet the SBA requirements, other lending options may be a better choice.
Key SBA loan alternatives
Traditional Business Loans
Traditional business loans come from banks, credit unions and other financial institutions. They can include term loans, real estate loans and lines of credit. These loans work best for businesses with a proven track record and strong financials, offering competitive rates and structured repayment terms.
- Usually require good credit and at least 2 years in business
- Competitive rates, but approval can be slow
- Best for established businesses with strong financials
Online Business Loans
Online business loans are designed for speed and convenience. You complete the application digitally, and funding can often arrive in just a few days. While rates are higher than traditional loans, they are more accessible to businesses that may not meet strict bank criteria.
- Applications are quick, with minimal documents
- Funds can be available in 1–3 days
- Interest rates are higher than SBA loans, but flexibility is better
Hot tip: Hot tip: If you need cash quickly to cover a short-term expense, online lenders are a practical choice.
- Required time in business: 6+ months
- Required annual revenue: $60k+
- Min credit score: 550+
- Required time in business: 1+ years
- Required annual revenue: $120k+
- Min credit score: 580+
- Required time in business: 6+ months
- Required annual revenue: $180k+
- Min credit score: 525+
Online Microloans
Microloans are smaller loans ideal for startups, women-owned or minority-owned businesses. They are usually offered by nonprofit organizations or online lenders and can provide funding quickly without extensive documentation. Loan amounts are typically under $50,000, making them ideal for smaller financing needs.
- Often offered by nonprofit organizations or online lenders
- Loan amounts are typically under $50,000
- Great for businesses with smaller financing needs
Equipment Financing
Equipment financing is specifically for purchasing machinery, vehicles or technology. The equipment itself typically serves as collateral, which can make approval easier than for general loans. Payments are spread over time, helping businesses manage cash flow while acquiring necessary assets.
- Spreads the cost of big purchases over time
- Usually easier to qualify for than general business loans
- Equipment itself often serves as collateral
Invoice Factoring
Invoice factoring lets businesses access cash tied up in unpaid invoices. A lender advances a portion of your invoices, giving you immediate working capital. This option is ideal for B2B businesses with predictable invoicing cycles.
- Lenders advance a percentage of unpaid invoices
- Helps manage cash flow while waiting for customer payments
- May cost more than other loans, but funding is quick
Hot tip: Hot tip: Invoice factoring works best for businesses with predictable B2B revenue.
Merchant Cash Advances (MCAs)
MCAs provide a lump sum of cash up front in exchange for a percentage of future credit card sales. Repayment is tied to sales volume, so amounts fluctuate based on business performance. They offer very fast access to cash but can be expensive if your sales slow down.
- Funding is fast, sometimes within 24 hours
- Qualification depends on daily card sales rather than credit score
- Can be costly, so review factor rates carefully
CDFI Loans
Community Development Financial Institutions (CDFIs) provide loans to businesses in low-income or underserved communities. These loans often have flexible requirements and are offered by banks, credit unions and loan funds certified by the US Treasury. CDFI loans focus on supporting businesses that may not qualify for traditional financing.
- Include banks, credit unions and loan funds certified by the US Treasury
- Focused on supporting underserved businesses
- Can be more flexible with credit and collateral requirements
Note: Government shutdowns can slow processing and funding for some CDFI loans.
USDA Loans
USDA loans are designed for agricultural businesses or companies located in rural areas. They can support farm operations, rural business development and expansion. These loans often come with lower rates and favorable repayment terms, though availability depends on location and business type.
- Can support farm operations, rural business development and expansion
- Often have lower rates and favorable repayment terms
- Availability depends on location and type of business
Note: USDA lending may be paused during a government shutdown, delaying new loans.
SBA Loan Alternatives Comparison Table
| Traditional Business Loans | Term loans, real estate loans and lines of credit from banks, credit unions and other institutions. | Weeks | Established businesses with strong financials | Mostly unaffected, though some regulatory or processing delays may occur |
| Online Business Loans | Fast, digital loans from online lenders, often with flexible requirements. | 1–3 days | Businesses needing quick access to cash | Unaffected |
| Online Microloans | Small loans (typically under $50,000) for startups, women- or minority-owned businesses, offered by nonprofits or online lenders. | 1–4 weeks | Startups and small businesses with smaller funding needs | May be affected if funded through government-backed programs |
| Equipment Financing | Loans or leases for machinery, vehicles or technology; the equipment often serves as collateral. | 1–7 days | Businesses needing to acquire or upgrade equipment | Unaffected |
| Invoice Factoring | Access cash from unpaid invoices; the lender advances a portion of the receivable. | 1–3 days | Businesses with predictable B2B revenue | Unaffected |
| Merchant Cash Advances (MCAs) | Lump sum up front, repaid via a percentage of future credit card sales. | under 24 hours | Businesses with strong daily card sales | Unaffected |
| CDFI Loans | Loans from banks, credit unions or loan funds certified by the US Treasury, focused on underserved communities. | 1–6 weeks | Businesses in low-income or underserved areas | May be affected due to reduced staffing or funding during a shutdown |
| USDA Loans | Loans for agricultural or rural businesses to support operations, expansion or equipment. | 4–8 weeks | Rural and agricultural businesses | Affected; USDA suspends new loan commitments during a shutdown |
When alternatives may be better than SBA loans
These options make sense if:
How to choose the right SBA loan alternative
Consider your business needs:
- How fast do you need the money?
- Can you handle higher costs for speed or flexibility?
- Do you need ongoing access or just a lump sum?
- Do you have collateral to secure a loan?
Key considerations before applying
Before committing, make sure you check:
- Total cost of borrowing, including APR and fees
- Repayment terms and structure
- Eligibility criteria for each lender
- Flexibility for your cash flow needs
Bottom line
SBA loans are a solid choice if you qualify, but alternatives exist for businesses that need speed, flexibility or smaller amounts. From traditional loans to microloans, CDFI funding, USDA loans and other options, the key is matching your business needs with the right type of financing. This approach ensures you get the support you need without taking on unnecessary risk.
