Get an SBA 7(a) Loan for Your Small Business

If you’re looking for small business financing, and you’ve exhausted all the conventional options, the SBA 7(a) loan could be a great way to fund your business. Right now, the SBA 7(a) loan is the most popular loan guaranteed by the U.S. Small Business Administration (SBA), with $36.5 billion of loans approved in 2021 alone.

Here are some key details about SBA 7(a) financing.

Loan Size: Can provide up to $5 million of capital for small businesses

Loan Term: Have loan terms of up to 10 years for working capital and 25 years for real estate

Interest Rates: Interest rates are typically between 6.25% and 8.75% (as of May 2022), depending on loan size and term

Loan Use: Can be used for working capital, equipment, buying a business or franchise, refinancing debt, and purchasing real estate

Credit Requirement: A credit score of around 680 is usually required

Down Payments: Usually requires a 10% to 20% down payment as well as a certain amount of collateral

Timing: SBA 7(a) loans can be approved in between one and 10 days, depending on the lender

SBA 7(a) Loan Terms and Requirements

SBA 7(a) loans offer flexible loan amounts, maturity, and rates to fit every situation. Whether you need a small working capital loan or a million-dollar note to build a facility, the SBA can help. However, in order to qualify for an SBA loan like the SBA 7(a) loan, your business will have to meet certain requirements.

Must not be over the SBA size limit for your particular industry

Must not be able to get a comparable loan from a bank on reasonable terms

Must not be involved in lending, rental real estate, investing, or speculation

Must operate as a for-profit business; no non-profits allowed

2022 SBA 7(a) Interest Rates

SBA 7(a) interest rates vary based on the Wall Street Journal Prime, or WSJ Prime. The typical interest rates for specific loans can be calculated using the interest rate spreads below.

Real Estate Loans (25-year terms)

Special Use Property: WSJ Prime plus 2.75%

Mixed-Use Property: WSJ Prime + 2.00%

Refinance (with no cash out): WSJ Prime + 1.75%

non-Real Estate Loans (10-year Terms)

Loans under $350,000: WSJ Prime plus 3.50%

Loans between $350,001 and $5 million: WSJ Prime plus 2.75%

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Other SBA Loan Types

While the 7(a) loan program may be the SBA’s flagship financial product, it’s far from the only loan they guarantee. And, at SBA 7(a) Loans, we want you to get the perfect financing solution for your business, even if isn’t an SBA 7(a) loan — or an SBA loan at all.

Some of the most popular other loans from the SBA include:

SBA 504 loans: Designed specifically for purchasing land, existing buildings, machinery, and other fixed assets, SBA 504 loans have lower interest rates than SBA 7(a) loans and can be issued in amounts up to $5.5 million in some circumstances. SBA 504 loans, however, cannot be used for working capital.

SBA disaster loans: These loans are designed to help businesses recover in the face of natural disasters. Unlike other SBA loans, disaster loans are provided directly through the SBA, not simply guaranteed by them. SBA disaster loans come in a few major varieties, highlighted below.

Business physical disaster loans: With loan amounts up to $2 million, these loans are designed to help business owners repair buildings, equipment, and other tangible assets. These loans are available to businesses of any size and even many nonprofits.

Business economic injury disaster loans (EIDL): Also available in amounts up to $2 million, these loans provide working capital for small businesses, certain co-ops, and some nonprofits.

Home and personal property disaster loans: After a disaster, home owners or condominium owners can borrow funds from the SBA in order to help repair or replace their primary home and personal property. Primary home repair/replacement loans are available in amounts up to $200,000, while personal property repair/replacement loans are available in amounts up to $40,000.