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) Inventory Business expansion Land acquisition and real estate construction Real estate improvements Refinance of existing business debt Startup costs (case-by-case basis) AMOUNTS·Minimum- $10,000 Maximum – $5 Million MATURITY·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 | INTEREST RATE/OTHER TERMSVariable 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)- 5,3,1 SBA GUARANTEE FEE:Loans of $150,000 or less: 2% of the guaranteed portion. Loans of $150,001 to $700,000: 3% of the guaranteed portion. Loans of $700,001 to $5 million: 3.5% of the guaranteed portion up to $1 million (plus tiered rates for higher amounts) Lender may charge up to $2500 packaging fee. WHO QUALIFIES·Must be for profit and meet size standards Good Character and credit management Must be an eligible type of business US Citizen or US National (No Green Card Holders) BENEFITS FOR BORROWERS·Long term financing |
Paul is NOT a loan broker but works for a financial institution that is a direct lender
