SBA 7(a) loan: what it is and how to apply
SBA 7(a) loan: what it is and how to apply
An SBA 7(a) loan is a small business loan issued by a private lender and partially backed by the US Small Business Administration. SBA 7(a) loans are the most common type of SBA loan, and the SBA guaranteed nearly 52,000 7(a) loans in fiscal year 2021, according to the Congressional Research Service.
Although SBA 7(a) loans can be difficult to obtain, they are an ideal option for business financing due to their long repayment terms and low interest rates. Additionally, 7(a) loans can be used for a variety of purposes, including working capital, business expansion, or the purchase of equipment and supplies.

We’ll start with a short questionnaire to better understand your unique business needs.

Once we discover your personalized matches, our team will consult with you on the process to follow.

Types of SBA 7(a) Loans

Although the “7(a) loan” is sometimes used as a general term, the SBA 7(a) loan program consists of several different types of loans.

The best SBA 7(a) loan for your business will depend on the amount of financing you need, how you intend to use the financing, and how quickly you will need it.

SBA 7(a) loan type

Maximum loan amount

Maximum SBA guarantee

SBA Application Processing Time


Standard 7(a) loan

$5 million.

85% for loans up to $150,000 and 75% for loans over $150,000.

Five to 10 business days.

Funding for working capital, purchases of equipment and supplies, and real estate and business expansion.

7(a) small loan


85% for loans up to $150,000 and 75% for loans over $150,000.

Five to 10 business days.

Fund smaller funding needs.

Express loan



Within 36 hours.

Accelerated financing for small loan amounts.

Express export loan


90% for loans of $350,000 or less and 75% for loans over $350,000.

24 hours.

Accelerated financing to promote the development of a company’s exports.

Export working capital loan

$5 million.


Five to 10 business days.

Working capital financing to support export sales.

International business loan

$5 million.


Five to 10 business days.

Long-term financing to increase export sales or upgrade to meet foreign competitors.

CAPLines of credit

$5 million.

85% for lines up to $150,000 and 75% for lines over $150,000.

Five to 10 business days.

Fund short-term and seasonal working capital needs.

CAPLines offers four different SBA lines of credit, but generally meet the same requirements as the standard 7(a) loan.

In general, SBA 7(a) loans over $25,000 require the borrower to post collateral, although specific requirements may vary by lender. Anyone holding more than 20% of the company must provide a personal guarantee.

Pilot Loan Programs: SBA Community Advantage

SBA’s pilot loan programs also fall under the broader 7(a) program. The SBA tests these programs for a limited time before deciding whether to extend them, make them a permanent part of the loan program, or let them expire.

Currently, the SBA Community Advantage Loan Program is running through September 30, 2022. This program focuses on financing small businesses in underserved markets.

SBA 7(a) Loan Terms

The maximum durations of SBA 7(a) loans depend on the use of the loan proceeds:

There are two exceptions to this: CAP credit lines have a maximum duration of 10 years and the builder credit line cannot exceed a duration of five years.

The SBA sets general guidelines for the 7(a) loan program that lenders must follow, dictating maximum loan amounts, terms, and interest rates; however, you will receive your SBA 7(a) loan details from your participating lender.

SBA 7(a) loan rate

SBA 7(a) loan interest rates are set based on the prime rate – a benchmark used by banks to dictate rates for consumer loan products, which changes based on Federal Reserve Board actions – plus a spread that is negotiated between you and your lender.

The spread can be fixed or variable, but is subject to SBA maximums, which are determined by the term, or maturity, and size of your loan.

Here are the current maximum SBA 7(a) loan rates:

SBA loan size

7(a) loan repaid in less than 7 years *

7(a) loan repaid in more than 7 years *

$25,000 or less



$25,001 to $50,000



Over $50,000



*Rates calculated with the current prime rate of 3.25%. Updated October 2021.

It is important to note that the interest rate is only part of the overall cost of a 7(a) loan. Although the SBA limits the fees that lenders can charge, most SBA 7(a) loans will have a guarantee fee, which ranges from 0.25% to 3.75% depending on the size of the loan.

SBA 7(a) loan requirements

With any type of 7(a) loan, you will need to meet a standard set of requirements set by the SBA, as well as all of your lender’s requirements in order to qualify for financing.

General eligibility criteria for the SBA 7(a) loan include:

  • Must be a for-profit business operating in the United States

  • Must be a small business, as defined by the SBA.

  • As a business owner, you must have invested your time and money in your business.

  • Must have researched other forms of financing before turning to an SBA loan.

  • Must be able to demonstrate the need for a loan and show the business purpose for which you will be using the funds.

  • Cannot be past due on any existing government loan.

Certain types of businesses — such as real estate investment firms, religious organizations, and gambling businesses — are not eligible for SBA 7(a) loans.

Additionally, while the SBA does not designate numerical minimums to assess a borrower’s creditworthiness and ability to repay a loan, lenders will generally want to see a good personal credit score (690 and above), strong annual income and at least two years in business. .

How to apply for an SBA 7(a) loan

To apply for a 7(a) loan, you will work with an SBA lending partner, such as a bank or credit union, to complete an application. The lender will submit your application package to the SBA in order to receive a loan guarantee; that way, if you fail to repay the loan, the SBA will reimburse the lender for the secured amount.

If you think you might qualify for an SBA 7(a) loan, you can complete the application process by following these three steps:

1. Find an SBA 7(a) lender

Hundreds of financial institutions offer SBA 7(a) loans, including national banks like Chase, Wells Fargo, and Bank of America. You can start by contacting a bank you have a relationship with to see if they offer SBA 7(a) loans.

The SBA also offers a lender reconciliation tool through its website which allows you to provide information about your business and connect with a lender in your area.

In general, you’ll want to look for SBA lenders who have experience issuing 7(a) loans, as these institutions will be able to speed up the application process, answer any questions you may have, and possibly increase your chances of approval.

Find a lender:

2. Gather your documents and submit your application

Your SBA lender can help you gather your documents to prepare and submit a completed SBA 7(a) loan application. While requirements vary by individual lender and SBA 7(a) loan type, here are some of the documents you may need to provide:

  • SBA Form 1919, Borrower Information Form.

  • Personal history and financial statement (SBA forms 912 and 413).

  • Business financial statements, such as balance sheets, profit and loss accounts and projected financial statements.

  • Business certificate or license.

  • Loan application history.

  • Tax returns.

  • Resume for every business owner.

  • Presentation and history of the company.

  • Commercial lease.

3. Wait for approval and close your loan

After submitting your SBA 7(a) loan application, you will need to wait for approval, either directly from your lender or from the SBA. SBA Preferred Lenders can approve loans without the SBA reviewing the application, speeding up the turnaround time.

Once your loan is approved, your lender will begin the closing process, which includes securing collateral, preparing loan documents, and meeting any other authorization requirements. Your lender will then disburse your funds and you will repay the loan in monthly installments over the term.

The approval time for an SBA standard 7(a) loan application should be five to 10 business days.

Alternatives to SBA 7(a) Loans

If an SBA 7(a) loan isn’t right for your business, consider:

Compare more financing options


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