A 7(a) loan is made by a bank or other approved lender, and the SBA guarantees part of it. That guarantee lets lenders approve longer terms than they might offer on their own. Uses include working capital, equipment, real estate, refinancing debt and buying a business.
The maximum loan is $5 million. The SBA guarantees 85% of loans of $150,000 or less and 75% of larger ones. Terms run up to 10 years, or up to 25 years for real estate and equipment with a long useful life. Rates are negotiated but capped: for variable rates, the cap is a base rate plus 3.0% on loans over $350,000, rising to base plus 6.5% on loans of $50,000 or less.
The trade-off is paperwork and time. Expect the lender to review tax returns, financial statements and credit, and expect an SBA guaranty fee on most loans.
Sources
- 7(a) loans — U.S. Small Business Administration (checked 2026-09-30)
- Types of 7(a) loans — U.S. Small Business Administration (checked 2026-09-30)
- Terms, conditions, and eligibility (7(a) loan program) — U.S. Small Business Administration (checked 2026-09-30)
- 15 U.S. Code § 636. Additional powers (subsections (a)(2) and (a)(18)) — Legal Information Institute, Cornell Law School (checked 2026-09-30)