The SBA (7)(a) Loan

The most popular loan option for financing a small business, insured by the Small Business Administration

If you’re looking for small business financing, and you’ve exhausted all the conventional options, the SBA 7(a) loan could be a great way to fund your business. Right now, the SBA 7(a) loan is the most popular loan guaranteed by the U.S. Small Business Administration (SBA).

The maximum loan amount for a standard 7(a) loan is $5 million. The SBA will guarantee this type of loan for up to 85% for loans smaller than $150,000 and 75% for loans greater than $150,000. Interest rates are negotiated between the lenders and borrowers, but that percentage may not exceed the SBA maximum rate. The turnaround time can be as short as five to 10 days. Some SBA-qualified lenders can also be granted authority to approve your loan without the SBA’s review, making the process faster.  

SBA (7)(a) Sample Terms:

  • Loan Size: Can provide up to $5 million of capital for small businesses

  • Loan Term: Have loan terms of up to 10 years for working capital and 25 years for real estate

  • Interest Rates: Most loans currently have interest rates between 5.5% and 8% depending on loan size and maturity

  • Loan Use: Can be used for working capital, equipment, buying a business or franchise, refinancing debt, and purchasing real estate

  • Credit Requirement: Typically require a credit score of around 680

  • Down Payments: Usually require a 10% to 20% down payment, as well as a certain amount of collateral

  • Timing:SBA 7(a) loans can be approved in between 1-10 days, depending on the lender

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