The maximum loan term on an SBA microloan is six years. It’s a relatively short loan term since you’re only borrowing a small amount: at most $50,000 according to the SBA microloans definition. The interest rate will depend on which community lender you work with. It’s typically between 8 and 13 percent.
The lender may also charge upfront closing costs to cover their expenses, such as pulling your credit report or submitting a UCC filing to the government showing they are using one of your assets as collateral.
To keep SBA microloan financing affordable, the intermediary lender may not charge any ongoing general fees besides the interest rate. Late fees are permitted, though, if you miss a payment. Late fees are usually no more than 5% of the amount you were supposed to pay.