SBA 7(a) Loan: What It Is and How to Apply

SBA 7(a) loans are issued by private lenders and backed by the SBA. Terms can vary by loan type and lender.
Randa KrissOct 26, 2021

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An SBA 7(a) loan is a small-business loan issued by a private lender and partially backed by the U.S. 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 hard to qualify for, they are an ideal option for business financing due to their long repayment terms and low interest rates. Plus, 7(a) loans can be used for a variety of purposes, including working capital, business expansions or purchasing equipment and supplies.

Types of SBA 7(a) loans

Although “7(a) loan” is sometimes used as an all-encompassing term, the SBA 7(a) loan program consists of several different loan types.

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

SBA 7(a) loan type

Maximum loan amount

Maximum SBA guarantee

Application turnaround time from SBA


Standard 7(a) loan

$5 million.

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

Five to 10 business days.

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

7(a) small loan


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

Five to 10 business days.

Funding smaller financing needs.

Express loan



Within 36 hours.

Expedited funding for smaller loan amounts.

Export express loan


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

24 hours.

Expedited funding to enhance a business’s export development.

Export working capital loan

$5 million.


Five to 10 business days.

Funding working capital to support export sales.

International trade loan

$5 million.


Five to 10 business days.

Long-term funding to expand export sales or modernize to contend with foreign competitors.

CAPLines of credit

$5 million.

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

Five to 10 business days.

Finance short-term and seasonal working capital needs.

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

In general, SBA 7(a) loans larger than $25,000 require the borrower to provide collateral, though specific requirements may vary by lender. Anyone who owns more than 20% of the business must provide a personal guarantee.

Pilot loan programs: SBA Community Advantage

The SBA pilot loan programs also fall under the larger umbrella of the 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 Sept. 30, 2022. This program focuses on providing financing to small businesses in underserved markets.

SBA 7(a) loan terms

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

  • 25 years for real estate.

  • 10 years for equipment.

  • 10 years for working capital or inventory loans.

There are two exceptions to this: CAPLines of credit have a maximum term length of 10 years, and the Builders line of credit cannot exceed a term of five years.

The SBA sets general guidelines for the 7(a) loan program that lenders must abide by, dictating maximum loan amounts, term lengths and interest rates; however, you'll receive the specifics of your SBA 7(a) loan from your participating lender.

SBA 7(a) loan rates

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

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

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

SBA loan size

7(a) loan paid off in under 7 years *

7(a) loan paid off in over 7 years *

$25,000 or less



$25,001 to $50,000



More than $50,000



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

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

SBA 7(a) loan requirements

Regardless of the type of 7(a) loan, you'll have to meet a standard set of requirements laid out by the SBA, as well as any requirements from your lender in order to qualify for financing.

General SBA 7(a) loan eligibility criteria include:

  • Must be a for-profit business operating in the U.S.

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

  • Must have, as a business owner, invested your own time and money into your business.

  • Must have sought out 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’ll use the funds.

  • Cannot be delinquent on any existing government loans.

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

Additionally, although the SBA doesn’t designate numerical minimums for evaluating a borrower’s creditworthiness and ability to repay a loan, lenders will typically want to see a good personal credit score (690 and above), solid annual revenue and at least two years in business.

How to apply for an SBA 7(a) loan

To apply for a 7(a) loan, you’ll work with an SBA lending partner, like 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; this way, if you default on the loan, the SBA will repay the lender the guaranteed 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 might start by contacting a bank you have a relationship with to see if it offers SBA 7(a) loans.

The SBA also offers a lender match tool through its website that allows you to provide information about your business and get connected with a lender in your area.

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

Find a lender: 

2. Gather your documents and submit your application

Your SBA lender will be able to help you gather your documents to prepare and submit a completed SBA 7(a) loan application. Although the requirements will vary based on the individual lender and the type of SBA 7(a) loan, here is some of the documentation you may need to provide:

  • SBA Form 1919, Borrower Information Form.

  • Personal background and financial statement (SBA Forms 912 and 413).

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

  • Business certificate or license.

  • Loan application history.

  • Income tax returns.

  • Resumes for each business owner.

  • Business overview and history.

  • Business lease.

3. Wait for approval and close on your loan

After you’ve submitted your SBA 7(a) loan application, you’ll need to wait for approval — whether from your lender directly or the SBA. SBA Preferred Lenders may approve loans without the SBA reviewing the application, thereby expediting the timeline.

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

The approval turnaround time on a standard 7(a) loan application from the SBA 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