Everything You Need to Know About the SBA Community Advantage Loan

Quentin Strode

November 19, 2021

As a small business owner or entrepreneur, learning how to get a small business loan is important to securing additional funding for your business. SBA lending is a traditionally popular method for obtaining such a loan. However, it is very difficult to qualify for most SBA loan programs, especially for new businesses or businesses without great credit.

Fortunately, there is an SBA loan that is specifically designed for businesses in low-income communities: the SBA Community Advantage loan. If you are a woman or minority small business owner, this loan program is a fantastic option for your business.

What is an SBA Community Advantage Loan?

The SBA Community Advantage loan is part of a pilot loan program launched in 2011 to help small businesses in underserved markets. The program provides special lenders (known as CA lenders) access to SBA 7(a) loans, the SBA’s most common loan program. Only certain organizations, primarily nonprofit financial intermediaries, are eligible to become CA lenders.

What are the Terms and Conditions of an SBA Community Advantage Loan?

This small business loan has the following terms and conditions:

  • Loan amount: Up to $250,000.
  • SBA guarantee: Maximum 85% guaranty for loans of $150,000; maximum 75% guaranty for loans of $150,001 or more.
  • Interest rate: Maximum of the prime rate plus 6% (generally 7% to 9%).
  • Maturity: Depends on the borrower’s repayment ability. Maximum 10 years for working capital, and maximum 25 years for real estate.
  • Use of proceeds: Loans may be used for any normal business purpose. May not be used for revolving lines of credit.

As you can see, SBA Community Advantage loans are highly desirable due to their low interest rates and long repayment terms.

Who Qualifies for an SBA Community Advantage Loan?

In general, you can qualify for this type of loan if you operate a for-profit business in an underserved market that meets the SBA’s definition of “small business”. You must also be able to demonstrate your creditworthiness and a viable business idea. However, unlike most traditional loans, qualification is not dependent on balance sheet size or the amount of collateral.

Should Your Business Apply?

Ultimately, only you can decide whether this SBA lending program is right for your business. To help with that decision, here are some advantages and disadvantages to consider.


  • Long repayment terms
  • Low interest rates
  • Lenient requirements (for an SBA loan)
  • The loan can be used for any business purpose
  • Great for women-owned and minority-owned businesses


  • Low loan amounts
  • Cannot be used as a revolving line of credit
  • Personal guarantee required

All in all, SBA Community Advantage loans offer access to affordable credit to businesses that might not qualify for traditional lending.

How NEW Community Investments Can Help

If you are a Los Angeles-area business owner who is interested in getting an SBA Community Advantage loan or just a small business loan California, look no further than NEW Community Investments. NEW-NCI offers free 1-on-1 consulting, expert support, and can even help you complete your loan application. Visit ncilending.com/apply to get started.

Quentin Strode

For 25 years, Quentin’s work has been focused on creating a powerful national community platform with innovative economic development solutions.

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