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.


·         Equipment purchases (machinery, business vehicles)

·         Permanent working capital

·         Inventory

·         Business expansion

·         Business purchase/acquisition (100% change in ownership)

·         Real estate purchase

·         Land acquisition and real estate construction

·         Real estate improvements

·         Refinance of existing business debt

·         Startup costs (case-by-case basis)



·         Minimum- $10,000

·         Maximum – $5 Million



·         Inventory or working capital- Typically structured at 7 years but not to exceed a maximum of 10 years

·         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


·     Variable Rates – based on Prime Rate based on dollar amount of loan and term

·     Fully-Amortized over life of loan (No Balloon)

·     Pre-Payment Penalty- Under $350,000- None, Over $350,000- 5,3,1%

·     SBA 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.



·            Must be for profit and meet size standards

·            Good Character and credit management

·            Must be an eligible type of business



·            Long term financing

·            Improved Cash flow

·            Fixed Maturity

·            No balloons

·            No prepayment penalty under 15 years




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