How Much Funding Should I Ask for When Applying for Federal Loans?

By Chip Phillips on May 11, 2020

The amount of money to request when applying for federal loans during the COVID-19 pandemic depends on the type of loan and the intended use of the funds.

Paycheck Protection Program (PPP)

This program builds on top of the existing U.S. Small Business Administration (SBA) loan program and provides forgivable loans to companies to keep employees on payroll. The loan amount to request should be related to covering payroll costs, rent, mortgage interest, or utilities.

The Small Business Administration has a resource to help calculate the maximum loan amount by business type here.

SBA Loans

The SBA provides a number of different types of loans. These loans are not tied to specific uses (unless specified in 7(a) programs). 

  • 7(a): Provides up to $5 million for borrowers who lack credit elsewhere. This is the SBA’s primary program for providing financial assistance to small businesses. The purpose of the loan and the maximum amount vary by the type of loan. More details on each type and their limits can be found here.
  • 504: Provides up to $5.5 million to approved small businesses so they can invest in real estate, expand, or modernize. More details on 504 loans can be found here.
  • Microloan: Provies up to $50,000 to help with start-up and expansion costs. These loans come through mission-based lenders who also provide business counseling. The average microloan is about $13,000.

Calculating How Much Funding to Ask For

There is not a set formula for calculating how much funding you should request, either in total or for each individual loan. Your best resource will be a personal one, likely either an internal or external accountant or your lending provider.