The SBA 7a loan program is designed to help small businesses access financing for working capital, debt consolidation, buying a business, and purchasing real estate or equipment.

The SBA 7a loan program is the most popular and flexible loan program offered by the SBA. It offers loan amounts ranging from $350,000 to $5 million, with repayment terms of up to 25 years, and up to 90%LTV. The interest rate on an SBA 7a loan is based on WSJ Prime Plus 2.5% to 3% and is adjustable quarterly.

To qualify for an SBA 7a loan, a small business must be owned by a U.S Citizen or Green Card Holder,

be for-profit, must have two years of operating history, operate in the U. S., and have a net worth of less than $15 million. 

The SBA 7a loan program is administered through a network of participating and SBA approved lenders, which include banks, credit unions, and other financial institutions. These lenders are responsible for underwriting and servicing the loans, and the SBA provides a guarantee to the lender that the loan will be repaid. This guarantee helps to reduce the risk for the lender, making it more likely that they will approve a loan for a small business.

There are several types of SBA 7a loans available to small businesses, including:

SBA 7a Express Loans: These loans are designed for businesses that need quick access to funding. They offer loan amounts ranging from $50,000 to $350,000, with an approval time of 48 hours or less. These loans can be used for debt consolidation, working capital, and equipment or Real Estate purchase.

SBA 7a Standard Loans: These loans are designed for businesses that need a larger amount of financing, with loan amounts ranging from $350,000 to $5 million.

SBA 7a Real Estate Loans: These loans are designed for businesses that need financing to purchase or improve real estate. They offer loan amounts ranging from $350,000 to $5 million, with repayment terms of up to 25 years. The business must occupy at least 51% of the property. Investment properties are not eligible. These loans often include working capital financing.

SBA 7a Equipment Loans: These loans are designed for businesses that need financing to purchase equipment. They offer loan amounts ranging from $350,000 to $5 million, with repayment terms of up to 10 years.

SBA 7(a) Requirements

To qualify for an SBA 7a loan, businesses must meet several SBA and lender requirements. 

  • The applicant business must operate for profit in the U.S. or its territories and be small as defined by the SBA’s size standards. To qualify, business owners also must:
  • Minimum 2 years in business
  • Must be a US Citizen or Green Card Holder
  • Must have a minimum credit score of 680
  • No recent personal or business bankruptcies 
  • Stakeholders of 20% or higher must guarantee the loan
  • In addition to these general requirements, borrowers must comply with their lender’s qualifications, including minimum credit score, profitability, and time in business requirements.

How to Apply for an SBA 7a Loan

Since SBA 7a loans are issued through an approved lender network, prospective borrowers must first find an eligible financial institution and then follow its application process. Business owners may also choose to work with a qualified business advisor to identify an approved lender and assist with the application, approval, and underwriting process. 

The following are general steps for SBA 7a Loan Application:

1. Find an SBA-approved Lender or a Qualified Business Advisor

SBA 7a loans are provided by SBA-approved lenders and backed by the SBA up to 90%. To apply for a 7(a) loan, start by contacting your preferred bank to find out if it’s an approved lender. Alternatively, you can work with a number of qualified advisors, like 504 Advisors Inc, who will find an SBA-approved lender and guide you through the application process.

2. Documentation and Submission

As with other types of small business loans, the SBA and lender evaluate whether an applicant can comfortably repay the loan without the risk of default. To demonstrate their creditworthiness and financial stability, applicants must provide extensive financial and business documents as part of the application process. These are some of the documents you may need to provide:

  • Borrower Information Form (SBA Form 1919)
  • Statement of Personal History (SBA Form 912)
  • Personal Financial Statement (SBA Form 413)
  • Personal and business tax returns for the last three years
  • Financial statements, including YTD profit and loss statements, the last three fiscal years
  • Projected financial statements, including a two-year projection 
  • Business Debt Schedule
  • Copies of business certificates or license, leases, and other relevant legal documents
  • Business overview, including an overview and history of the company and owner resumes

3. Loan Pre-Approval or Term Sheet

SBA loan approval times vary based on the type of the SBA 7(a) loan, and generally require between five and 10 days of turnaround approval. At this stage the lender may issue a Term Sheet or proposal of terms outlining the general terms of the loan including the loan amount, interest rate and length of the loan term.

4. Underwriting and funding

The SBA 7a loan underwriting generally take between 60 and 90 days to process from the signed term sheet to closing. During the underwriting process, you may be asked to meet additional authorization requirements or provide evidence of collateral. If collateral appraisals, environmental investigations, or other services are required, you will have to cover these costs out of pocket. However, these expenses will be outlined in the Term Sheet.

Applicable SBA guaranty fees are also charged at closing, and generally range from 2% to 3.5% of the loan amount.  Lender servicing fees may apply but these are capped, require SBA approval and are only relevant when extraordinary servicing is required. All these fees can be included in the loan amount and may not require to be paid out of pocket. Funding times vary by loan type and lender. 

Pros and Cons of SBA 7(a) Loans

If you’re considering applying for an SBA 7a loan, make sure you understand the pros and cons of the SBA 7a loan program.

Pros of SBA 7a Loans:

  • Adjustable Interest rates WSJ Prime plus 2% to 3%
  • Loan Terms up to 25 years
  • Down payments are low and generally range from 10% to 20%
  • Up to 100% for Owner Occupied property acquisitions

Cons of SBA 7a Loans:

  • The application process is cumbersome and requires extensive documentation
  • Approval times are lengthy 
  • Adjustable interest rates
  • Certain types of businesses are not eligible
  • Loans may require business and personal collateral
  • Qualification standards are rigorous

In Conclusion

To apply for an SBA 7a loan, you can approach any of the SBA-approved lenders. The lenders on the Preferred Lending Partners list, have the authority to underwrite and make credit decisions for SBA loans without the SBA’s approval. A list of the approved and participating lenders can be found on the SBA website.

You may also choose to work with one of several business advisors, such as 504 Advisors, Inc., and others to help you navigate the application and the underwriting process. 

About 504 Advisors, Inc.

504 Advisors functions as a consultant and an advisor for our clients throughout the entire SBA & Real Estate financing process. As business owners and entrepreneurs, we understand how daunting business financing process can be, and use our close to two decades of experience in commercial finance to guide you through the financing options and the loan application process.

Our goal is to be your trusted financial partner and advisor, by providing our clients access to capital and financing solutions necessary to run their business.

Capitalize on our relationships and find the best loan that fits your needs. For more information visit

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