SBA 7(a) Loan Program

The 7(a) Loan Guaranty is the SBA’s most commonly-used loan program; most American banks, and some non-bank lenders, participate in this program. These loans are given on a guaranty basis, which means that the lenders structure the loans according to SBA standards, and in return are granted a guaranty on a portion of the loan. Lenders are never granted a full guaranty on a 7(a) loan.

This loan program is the most accommodating loan program offered by the SBA. The eligibility requirements are intentionally broad in order to qualify many diverse businesses. To be eligible, an applicant business must be for profit; conduct business in the United States or its possessions; all owners of 20% or more must have personal equity to invest; and the business must use alternative sources of financing, such as personal assets, in addition to the loan.
Loan proceeds may be used to assist a new business in operation, to assist an existing business in expansion or acquisition, or for any other sound business purpose. The maximum loan maturity is seven years for working capital, though 10-year terms can be granted as needed to ensure repayment, and 25 years for real estate, equipment and other fixed assets.