SBA lines of credit (CAPLines and others)
Bank lines of credit of up to $5 million for working capital, contracts, seasonal peaks or building projects, with the SBA guaranteeing part so lenders will say yes. Rates are capped, but owners usually guarantee the line and the lender watches your receivables and inventory closely.
- Personal guarantee likely
- Secured on invoices
- Secured on assets
- Your home or other personal assets
How it works
The SBA does not lend the money. It guarantees part of a line of credit from a bank or other lender under its 7(a) program. You apply to the lender. The SBA's rulebook (SOP 50 10 8.1, in force from October 1, 2026) sets out these kinds:
CAPLines, for short-term operating needs, up to $5 million and up to 10 years:
- Working Capital CAPLine: a revolving line against your receivables and inventory, for a business that has them. Lines of $2 million or more must be run on a borrowing base certificate, where you report what you are owed and what you hold; smaller ones can instead be secured one-for-one with collateral.
- Contract CAPLine: pays the costs of one or more specific contracts or purchase orders (under a master agreement), for a business that has completed similar contracts at a profit. Your customer is usually told to pay the lender directly. See purchase order and contract financing.
- Seasonal CAPLine: pays for the build-up of stock, receivables or labor before your busy season, for a business in operation at least 12 months with a clear seasonal pattern. It is repaid as the season's sales come in.
- Builders CAPLine: for small general contractors building or renovating homes or commercial buildings to sell.
Manufacturers' Access to Revolving Credit (MARC): a revolving line for manufacturers (up to $5 million) and for wholesalers and parts of the food supply chain (up to $2 million). It can revolve for up to 10 years, then must be repaid over up to 10 more.
Working Capital Pilot (WCP): listed on the SBA's 7(a) page on October 20, 2026, as a monitored line of credit of up to $5 million for up to 60 months, for businesses with at least a year of operating history and timely financial statements, receivables and payables reports and inventory reports.
SBA Express lines of up to $500,000 are approved by the lender under its own procedures, with a 50% SBA guarantee.
Guarantee, interest and fees: the SBA guarantees up to 85% of lines of $150,000 or less and up to 75% of larger ones (50% for SBA Express). Variable rates are capped at a base rate (usually prime) plus 6.5 percentage points for $50,000 or less, 6 points up to $250,000, 4.5 points up to $350,000 and 3 points above that. The lender pays the SBA an upfront guaranty fee and may pass it on to you: 0.25% of the guaranteed part for a line of 12 months or less, and 2% to 3.75% for longer ones. A lender that monitors your receivables and inventory can also charge a yearly servicing fee, generally up to 2% of the balance.
Who can borrow: the usual 7(a) rules: a for-profit small business in the US that cannot get the credit on reasonable terms without the SBA, whose owners and guarantors are all US citizens or US nationals living in the US. Owners of 20% or more usually guarantee the line personally.
Upsides and downsides
Upsides
- The SBA caps the interest rate and the guaranty fee
- A guarantee makes lenders more willing to offer a line to a smaller or younger business
- Different kinds for contracts, seasons and building projects, not only general working capital
- Lines can run for up to 10 years, renewed each year
Downsides
- Owners of 20% or more usually guarantee the line personally
- Lines run on a borrowing base need regular reports and checks on your receivables and inventory
- Not for paying overdue payroll or sales taxes, buying equipment, or floor plan financing
- Not open to a business with any owner or guarantor who is not a US citizen or US national
Risks
- If your receivables or inventory fall, the lender stops lending until the line is back in balance
- If the business cannot repay, the lender can take the collateral and pursue the guarantors, including equity in their homes
- On a MARC line, the lender reviews your results each year and can turn the line into a term loan if they weaken
What it costs
- How it is priced
- Interest set by the lender, capped by the SBA at the prime rate (or another base rate) plus 3 to 6.5 percentage points depending on the line's size
- Costs that are easy to miss
- An upfront guaranty fee of 0.25% of the guaranteed part for lines of 12 months or less, and 2% to 3.75% for longer ones, often passed on to you
- A yearly servicing fee of up to 2% of the balance on lines run on a borrowing base, and sometimes more on Working Capital CAPLines
- Another guaranty fee if a line of 12 months or less is extended beyond 12 months
CAPLines, MARC (manufacturers) and the Working Capital Pilot up to $5 million; MARC for other industries up to $2 million; SBA Express up to $500,000.
Applying to an SBA program? Is my business small?: check whether your business counts as small
Does it fit?
Could fit when
- You need a line of credit for working capital and have receivables or inventory to secure it
- You have a contract to carry out and need cash to pay for the work before the customer pays
- A bank has turned you down for a line of credit, or will lend only on terms you cannot meet
Unlikely to fit when
- The business grows, makes, processes, distributes or sells marijuana or marijuana products, for medical or recreational use, even where the state allows it
- The business earns much of its revenue from gambling, adult content, or political or lobbying work (the SBA's limits are more than a third, more than 5% and more than half of revenue)
- You need more than $5 million
- The owners will not give personal guarantees (owners of 20% or more usually must)
- The business has been in operation for less than a year (seasonal lines and the Working Capital Pilot need at least a year)
- You need the money within days
- Any owner or guarantor is not a US citizen or US national living in the US
Who can use it
- Business types: Sole proprietorship, Partnership, LLC, S corporation, C corporation, Benefit corporation, Cooperative
- A for-profit small business under the SBA's size standards that cannot get the credit on reasonable terms without the SBA
- Working Capital CAPLine: receivables (not notes receivable) or inventory
- Seasonal CAPLine: at least 12 months in operation and a clear seasonal pattern
- Contract CAPLine: a record of completing similar contracts at a profit
- Every owner, direct or indirect, and every guarantor is a US citizen or US national living in the US
Not available for: Every kind of business the SBA does not lend to under 7(a), including nonprofits, lenders and passive landlords, and any activity that is illegal under federal, state or local law; MARC: industries other than manufacturing, wholesale (except motor vehicle wholesalers and wholesale agents and brokers), farming and parts of the food supply chain; Businesses that grow, make, process, distribute or sell marijuana or marijuana products, for medical or recreational use, even where the state allows it.
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all government-backed and community lending
0%
0 of 6 ticked
- SBA Form 1919
- Personal financial statements
- Financial statements
Regulation and protections
Regulators: U.S. Small Business Administration (SBA); Consumer Financial Protection Bureau (CFPB).
Who runs it: Federal program.
SBA rules set the guarantee, the longest term, the guaranty fee, the highest interest rate and limits on servicing fees. The Equal Credit Opportunity Act (Regulation B) covers business credit: if your business had sales of $1 million or less last year, the lender must tell you its decision within 30 days of a complete application and, if it turns you down, give you the reasons or tell you how to ask for them.
Federal Truth in Lending rules (Regulation Z) do not cover business loans, so ask for the rate, fees and total cost in writing.
Types of provider: Banks, credit unions and other lenders that make SBA 7(a) loans.
SBA 7(a) lenders that lend across the country: 12 examples in the directory · chosen from an official list by a stated rule, never for payment
Also consider
What has changed
- Marijuana businesses, medical or recreational, are listed as not eligible even where the state allows them (SOP 50 10 8.1), and the fit finder now says so.
Sources
- SBA: SOP 50 10 8.1, Lender and Development Company Loan Programs (effective October 1, 2026): Section B, Chapters 3 (MARC) and 4 (CAPLines), fees, and Appendices 16 to 19 · checked October 20, 2026
- SBA: 7(a) loans, including the 7(a) Working Capital Pilot (WCP) program · checked October 20, 2026
- 12 CFR 1002.9 (Regulation B): notifications, including to business credit applicants · checked October 17, 2026
- 12 CFR 1026.3 (Regulation Z): exempt transactions, including business credit · checked October 17, 2026
Something wrong or out of date?
Every fact here comes from a source, and rules and limits change. Email what looks wrong to data@fundladder.uk and, if you can, where you saw the right information. We use your email only to check the correction and reply. Privacy