What Is the Average Small Business Loan?

According to the SBA’s 2023 report, there are 33.3 million small businesses in the U.S. Many small business owners depend on loans to manage cash flow, grow their business, or cover daily expenses. However, average business loan amounts vary based on business size, revenue, and lender type.

B2B Reviews analyzed the latest data to break down average loan amounts, approval trends, and key factors that shape small business lending.

The Average Small Business Loan Amount in the U.S.

The average small business loan amount is $663,000, but actual loan sizes vary. Some lenders offer larger amounts, while others focus on smaller, more accessible options.

Traditional bank loans and SBA-backed loans provide higher funding, while online lenders are better for businesses needing quick access to cash. Credit history, revenue, and lender policies also influence how much a business can borrow.

If you’re looking for the best business loan options in 2025, comparing different lenders can help you find the right fit.

Types of Small Business Loans and Their Averages

There are different types of business loans, each designed for specific business needs.

Some loans help with day-to-day expenses, while others support long-term investments like real estate or equipment financing. Loan amounts vary widely depending on the lender, loan type, and business qualifications, such as annual revenue, profitability, and creditworthiness.

• SBA Loans – Government-backed loans that provide affordable business financing options.
• SBA 7(a) Loans – The most popular SBA loan, primarily used for working capital, equipment, and expansion. The average loan amount as of fiscal year 2024 is $443,097.
• SBA 504 Loans – Designed for real estate and large equipment purchases, offering long-term, fixed-rate financing. The average loan amount is $112,115.
• Microloans – Small loans typically provided by nonprofit lenders to help startups and small businesses. The average loan amount is $13,000.
• Traditional Bank Loans – Business loans provided by banks, usually requiring strong credit scores and financials.
• Large Banks – Offer an average of $593,000 in funding, primarily for well-established businesses seeking larger loans.
• Small Banks – Provide an average of $146,000 per loan, catering to smaller businesses with more accessible financing.
• Online Lenders – Digital lenders provide faster approvals and more flexible requirements but often at higher interest rates. Loan amounts generally range from $50,000 to $80,000.

Each loan type serves different business needs, with factors like credit history, revenue, and lender policies playing a major role in determining loan eligibility.

Average Small Business Loan Approval Rates

Loan approval rates for small businesses have fluctuated in recent years, staying just above or below 50% since the early COVID-19 years.

In Q1 2024, the approval rate stood at 51.25%, dropping to 47.84% in Q2, and further declining to 46.63% in Q3. This shows that less than half of small business loan applications were approved in Q3 2024, reflecting the ongoing challenges in securing financing.

The 2022 Federal Reserve findings provide a detailed look at approval rates by lender type, offering a broader perspective on small business lending patterns.

• Small banks approved 82% of applicants at least partially, making them the most reliable source of funding.
• Finance companies had a 76% approval rate, slightly lower than small banks.
• Online lenders approved 71% of applicants. They offer easier access to funds but often charge higher interest rates.
• Large banks were the most selective, approving only 68% of applications.

Statistics show that approval rates vary over time, influenced by factors such as business ownership, revenue, and industry trends. Some businesses secure funding more easily, while others face greater challenges depending on their financial standing and sector.

• Business ownership: White-owned businesses had the highest full approval rate at 66%, while Hispanic- and Asian-owned businesses both saw 46%.

• Revenue:
  • Businesses earning over $10 million had the highest approval rate at 88%.
  • Those making $1 million–$10 million saw 70% approval.
  • Smaller businesses earning $100K–$1 million had a 61% approval rate.
  • Businesses with less than $100K had the lowest approval at 50%.
• Industry impact:
  • Manufacturing had the highest approval rate at 67%.
  • Professional services and real estate saw 59% approval.
  • Leisure and hospitality had the hardest time, with only 36% receiving full approval.

Interest Rates and Repayment Terms

Interest rates and repayment terms depend on the loan type and lender. Some loans have fixed rates with stable payments, while others have variable rates, which change over time. Repayment terms vary based on the loan structure and the borrower’s financial profile.

• Term Loans – A common type of short-term loan with structured repayment schedules.
  • Fixed rates: 7.98%
  • Variable rates: 8.74%
• SBA 7(a) Loans – These loans provide lower interest rates but often come with stricter requirements.
  • Fixed rates: 12.5% to 15.5%
  • Variable rates: 10.5% to 14%
• Lines of Credit – Revolving credit that allows businesses to borrow as needed.
  • Fixed rates: 7.65% to 8.19%
  • Variable rates: 8.95% to 9.15%
• Merchant Cash Advances – Instead of fixed installments, borrowers repay a percentage of daily sales.
  • Interest is based on a factor rate of 1.1 to 1.5, meaning businesses repay 1.1 to 1.5 times the borrowed amount.
• Invoice Factoring – Businesses sell unpaid invoices to a lender for immediate cash flow.
  • The cost is measured by a discount rate (factor rate) which is generally 1% to 5% of the invoice amount.

Fixed-rate loans provide stability, while variable-rate options fluctuate with market conditions. Merchant cash advances and invoice financing work differently, with repayment structures based on sales volume or outstanding invoices.

Bottom Line

Small business loan approval rates have fallen below 50% in 2024, making it difficult to get approved. However, loan amounts are still strong, and businesses that qualify can secure the capital they need.

Larger banks and SBA loans offer bigger funding, while online lenders provide faster approvals but at higher costs. Interest rates and repayment terms vary, so it’s important to compare options and choose what works best for your business.

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