What is the SBA 7(a) Program? 
The 7(a) Loan Program is SBA’s primary program for helping small businesses with financing guaranteed for a variety of general business purposes.
| USES OF PROCEEDS· Equipment purchases (machinery, business vehicles) Permanent working capital Inventory Business expansion Business purchase/acquisition Real estate purchase Land acquisition and real estate construction Real estate improvements Refinance of existing business debt Startup costs (case-by-case basis)
AMOUNTS·
MATURITY· Equipment, fixtures, or furniture- Typically structured at 7 years but not to exceed a maximum of 10 years, it may not exceed the economic useful life. Real Estate, including acquisition, rehabilitation, renovation, or construction- Up to 25 years plus any interest period to reasonably complete the construction or improvements· 7(a) Refinancing- Must coincide with the remaining useful life of the assets being refinanced or use of proceeds chart | INTEREST RATE/OTHER TERMS Variable Rates – based on Prime Rate based on dollar amount of loan, term and collateral. Fully-Amortized over life of loan (No Balloon Payments) Pre-Payment Penalty- under 15 years None Over 15 years (1st 3 years)- 5,3,1SBA Guaranty Fee $1 Million or less= 0.0%$1M – $2M = 1.45% (Up to $1M plus 1.70% over $1 Mil $2,000,001- $5M= 3.5% (up to $1M plus 3.75% over $1 Mil (SBA changes SBA fees from time to time)· Lender may charge up to $2500 packaging fee. WHO QUALIFIES· Good Character and credit management Must be an eligible type of business BENEFITS FOR BORROWERS· |
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