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    7 (A) Loans

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    va.amazonsellercentral
    The 7(a) loan program provides financial assistance to small businesses for working capital, equipment, real estate, and other needs. It is the SBA's most common loan program and has a maximum loan amount of $5 million. To qualify, businesses must be small, use the funds for business purposes, and demonstrate a need for the loan.

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    7 (A) Loans

    Uploaded by

    va.amazonsellercentral
    5 views4 pages
    The 7(a) loan program provides financial assistance to small businesses for working capital, equipment, real estate, and other needs. It is the SBA's most common loan program and has a maximum loan amount of $5 million. To qualify, businesses must be small, use the funds for business purposes, and demonstrate a need for the loan.

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    7(a) Loans

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    The 7(a) loan program provides financial assistance to small businesses for working capital, equipment, real estate, and other needs. It is the SBA's most common loan program and has a maximum loan amount of $5 million. To qualify, businesses must be small, use the funds for business purposes, and demonstrate a need for the loan.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    5 views4 pages

    7 (A) Loans

    Uploaded by

    va.amazonsellercentral
    The 7(a) loan program provides financial assistance to small businesses for working capital, equipment, real estate, and other needs. It is the SBA's most common loan program and has a maximum loan amount of $5 million. To qualify, businesses must be small, use the funds for business purposes, and demonstrate a need for the loan.

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    5/19/2021 7(a) Loans

    MENU

    7(a) Loans
    SBA’s most common loan program, which includes nancial help for
    businesses with special requirements.

    What is a 7(a) loan?


    The 7(a) Loan Program, SBA’s most common loan program, includes financial help for small
    businesses with special requirements. This is the best option when real estate is part of a business
    purchase, but it can also be used for:

    Short- and long-term working capital


    Refinance current business debt
    Purchase furniture, fixtures, and supplies

    The maximum loan amount for a 7(a) loan is $5 million. Key eligibility factors are based on what
    the business does to receive its income, its credit history, and where the business operates. Your
    lender will help you figure out which type of loan is best suited for your needs.

    Am I eligible?
    To be eligible 7(a) loan assistance, businesses must:

    Operate for profit


    Be considered a small business, as defined by the SBA
    Be engaged in, or propose to do business in, the United States or its possessions
    Have reasonable invested equity
    https://www.sba.gov/funding-programs/loans/7a-loans 1/4
    5/19/2021 7(a) Loans

    Use alternative financial resources, including personal assets, before seeking financial
    MENU
    assistance
    Be able to demonstrate a need for a loan
    Use the funds for a sound business purpose
    Not be delinquent on any existing debt obligations to the U.S. government

    Some businesses may not qualify for a 7(a) loan. Read more about what the SBA considers an
    ineligible business.

    What do I need to apply?


    Once you have decided to apply for a loan guaranteed by the SBA, you need to collect the
    appropriate documents for your application. The process starts by working with your local lender
    within SBA guidelines.

    Refer to the 7(a) Loan Application Checklist to see what you need to apply.

    How do I use the 7(a) loan?


    Basic uses for the 7(a) loan include:

    Long- and short-term working capital


    Revolving funds based on the value of existing inventory and receivables
    The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
    The purchase of real estate, including land and buildings
    The construction a new building or renovation an existing building
    Establishing a new business or assisting in the acquisition, operation or expansion of an
    existing business
    Refinancing existing business debt, under certain conditions

    How do I pay back my 7(a) loan?


    Loan repayment terms vary according to several factors:

    Repayment terms

    https://www.sba.gov/funding-programs/loans/7a-loans 2/4
    5/19/2021 7(a) Loans

    Most 7(a) term loans are repaid with monthly payments of principal and interest.
    MENU
    Payments stay the same for fixed-rate loans because the interest rate is constant
    For variable rate loans, the lender can require a different payment amount when the
    interest rate changes

    Interest rates

    3 Acceptable Base Rates:

    Prime rate published in a daily national newspaper


    London Interbank One Month Prime plus 3%
    SBA Peg Rate

    Maximum Allowable Spread:

    Maturity < 7 years = 2.25%


    Maturity > 7 years = 2.75%

    Percent of Guaranty

    SBA can guarantee up to:

    85% of a loan up to $150,000


    75% of a loan greater than $150,000

    Existing borrowers
    https://www.sba.gov/funding-programs/loans/7a-loans 3/4
    5/19/2021 7(a) Loans

    Existing borrowers can create an account in the SBA Capital Access Financial System (or CAFS) to
    MENU
    monitor their loan status. Get account enrollment instructions.

    What We Do SBA Team

    Newsroom SBA Performance

    FOIA Inspector General

    Contact SBA Privacy Policy

    SBA en Español Blog

    Sign up for SBA email updates

    SUBSCRIBE

    U.S. Small Business Administration409 3rd St, SW. Washington DC 20416

    https://www.sba.gov/funding-programs/loans/7a-loans 4/4

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