SBA Community Advantage Loans: What They Are and How to Qualify

Community Advantage loans can be a good option for small-business owners who may not qualify for other SBA loans.
Randa Kriss
By Randa Kriss 
Edited by Sally Lauckner

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SBA Community Advantage loan program update:

The SBA Community Advantage loan program expired on Sept. 30, 2023.

Previous Community Advantage lenders who applied to become Community Advantage Small Business Lending Companies (CA SBLCs) will be able to issue regular 7(a) loans under this new license. CA SBLCs will continue to prioritize funding for borrowers in underserved markets.

SBA Community Advantage loans, or CA loans, are part of the U.S. Small Business Administration’s 7(a) loan program. These loans are designed to provide financing to small businesses in traditionally underserved markets, such as startups, veteran-owned companies and businesses in low-income communities.

Community Advantage loans are a good funding choice because they offer competitive interest rates and repayment terms. These small-business loans also tend to have more flexible qualification requirements than other SBA loans.

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What is an SBA Community Advantage loan?

An SBA Community Advantage loan is a small-business loan that’s partially guaranteed by the SBA and issued by participating lenders, such as Certified Development Companies, community development financial institutions and SBA microloan intermediaries.

Community Advantage loans are part of the SBA pilot loan program, meaning they’re available for a limited time unless the program is extended or made permanent. The program is set to expire Sept. 30, 2023

U.S. Small Business Administration. SBA Information Notice.

Pilot loan programs, including Community Advantage loans, fall under the umbrella of the SBA 7(a) loan program and follow many of that program’s guidelines.

SBA Community Advantage loan features

SBA Community Advantage loans are available in amounts up to $350,000 as a term loan or line of credit. These loans can be used for a range of purposes, including real estate purchases, business expansions or renovations, equipment purchases and working capital.

Here are the key details:

Loan types

  • Term loan or line of credit.

  • CA lenders have to be authorized to issue lines of credit.

Maximum SBA guarantee

  • 85% for loans of $150,000 or less.

  • 75% for loans greater than $150,000.

  • 90% for international trade loans.

Loan amount

  • Up to $350,000.

Repayment terms

  • Up to 10 years for working capital, equipment and inventory purchases.

  • Up to 25 years for real estate purchases.

  • Lines of credit may not exceed 10 years inclusive of a term-out period.*

Interest rates

  • Set by the lender, but subject to SBA maximums.

  • For loans of $50,000 or less, can’t be more than the prime rate plus 6.5%.

  • For loans greater than $50,000 up to and including $250,000, can’t be more than prime rate plus 6%.

  • For loans greater than $250,000 up to and including $350,000 can’t be more than prime rate plus 4.5%.


  • One-time guarantee fee that varies based on the size of the loan; fees are adjusted every fiscal year.

  • No guarantee fees for CA loans for the 2023 fiscal year.

  • Lenders can charge a fee for packaging and servicing but are subject to SBA maximums.

Funding speed

  • Varies based on the lender.

  • Generally, applications are approved within five to 10 days.

*CA lines of credit can be structured with a renewable 12-month period, without a term-out. A term-out refers to the period in which you repay the loan but can’t take money out.

Lines of credit of more than 12 months must be structured with a term-out period that is not less than the draw period — in other words, the period during which you can take out funds. Regardless of the loan term, you cannot make withdrawals after the initial 60-month period.

Bluevine - Line of credit
OnDeck - Online term loan
Funding Circle - Online term loan
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SBA Community Advantage loan requirements

Your business must meet the following criteria to qualify for a Community Advantage loan:

  • Be a for-profit business operating in the U.S. or one of its territories.

  • Meet the SBA’s definition of a small business.

  • Show a need for financing.

  • Have invested equity in the business.

  • Have put financial resources, including personal assets, toward the business.

You’ll also have to meet the individual lender’s eligibility criteria. These SBA loan requirements vary, but you’ll typically need a credit score of 600 or higher and strong business financials that show your ability to repay the loan.

Whereas standard SBA lenders will often require strong credit and at least two years in business, CA lenders tend to be more flexible. Startups can be eligible for a Community Advantage loan; businesses with one year or less in operation, however, must provide an equity injection of 10% of the total project costs.

Some lenders may require you to put up collateral to secure your loan. Lenders are not required to take collateral for loans of $50,000 or less and must follow their standard underwriting policies for loans greater than $50,000.

Borrowers who own 20% or more of the business must sign an SBA personal guarantee.

How to get an SBA Community Advantage loan

Community Advantage loans are available through approved SBA lenders, which may include Certified Development Companies, community development financial institutions and microloan lenders. Pursuit Lending, for example, which works with businesses throughout New York, New Jersey, Pennsylvania and Connecticut, offers SBA Community Advantage loans in addition to standard 7(a) loans.

You’ll need to apply directly with a participating financial institution to get a Community Advantage loan. The SBA maintains a list of lenders sorted by state and loan approvals. You can filter this data to see the most active CA lenders

U.S. Small Business Administration. 7(a) & 504 Lender Report. Accessed Feb 6, 2023.

The best CA lender will be the one that you can qualify for with the lowest interest rate. You’ll want to research and compare multiple lenders to find the right one for your business.

How to apply for an SBA Community Advantage loan

The SBA loan application process can vary from lender to lender — however, you’ll generally need to provide the following documentation:

  • SBA Form 1919, Borrower Information Form.

  • SBA Form 912, Statement of Personal History.

  • Personal financial statement (you can use SBA Form 413).

  • SBA Form 2449, Community Advantage Addendum.

  • SBA Form 148, Unconditional Guarantee (or the lender’s equivalent).

  • Business financial statements, such as income statements, balance sheets and cash flow projections.

  • Income tax returns.

  • Detailed schedule of collateral, if applicable.

  • Existing debt schedule, if applicable.

  • Business certificates or licenses.

  • Business overview and history.

  • Business lease.

Once you’ve submitted your application, the lender will review it and make a decision. Unlike some other lenders, CA lenders are able to make a final decision without prior review from the SBA — which should expedite the approval process.

Although the timeline will ultimately depend on your lender, you may be able to receive approval in five to 10 days.

A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.

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Frequently asked questions

Generally, you’ll want to have a credit score of 600 or higher to qualify for an SBA Community Advantage loan. Credit score requirements vary from lender to lender.

Individual lenders set interest rates for Community Advantage loans but are subject to SBA maximums. Rates range from prime plus 4.5% to prime plus 6.5%, depending on how much you borrow.