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SBA 7(a) Loans

Small Business Loans 

The SBA 7(a) loan is the Small Business Administration's flagship program for small business financing. In 2017, the SBA guaranteed more than $25 billion of 7(a) loans for over 62,000 businesses. Under the program, Commercial Real Estate Loans. underwrites the loan; the Small Business Administration then provides a guarantee that insures a portion of the loan in the case of a mortgage default. SBA 7(a) loans can be used to fund owner-occupied commercial real estate, including industrial, retail, and hospitality properties, as well as funding working capital, equipment, and inventory. In today's competitive economic environment, SBA 7(a) loans are a fantastic way to help fund both brand new and established small businesses throughout the United States. 

In addition to industrial, retail, and hospitality projects, Commercial Real Estate Loans. also underwrites SBA 7(a) loans for: 

SBA 7(a) Loan Terms and Eligibility 


 SBA 7a loans have terms and eligibility requirements including: 

  • A maximum loan amount of $5 million, no minimum loan amount (most loans, however, are $30,000 or more)

  • The business must meet the SBA's size standards for its particular industry

  • The business must have less than 500 employees, and less than $7.5 million in revenue each year for the last 3 years

  • The business must physically be based in the U.S., and operate with in the U.S. and its territories

  • The business must operate for profit

  • Business owners must first have used other sources of financing, including personal funds, in order to qualify

  • Businesses must not be involved in lending, real estate, or speculation


  • Flexibility in underwriting

  • Often has lower interest rates than other comparable financing options

  • Long loan terms, up to 25 years for real estate, 10 years for equipment, and 10 years for working capital or inventory

  • Flexible collateral requirements

  • Lenders are prohibited from charging fees including:

    • Insurance service fees

    • Add-on interest charges

    • Legal service fees (with some exceptions)

    • Broker referral fees



  • Requires a borrower to put down all business assets as collateral for the loan

  • If a borrower doesn't have enough collateral, they may need to put down personal assets, such as home or cars

  • Requires borrowers to have significant equity in their business: startups must typically must have $1 invested for every $3 in SBA 7a loans, while established businesses usually must have $1 invested for every $4 in SBA financing

  • Cannot be used for businesses who are trying to pay off unsecured debt

  • Requires borrowers to disclose personal and business credit histories

  • Prepayment penalties assessed on loans with a 15+ year term

  • Guarantee fees are assessed by the SBA on loans above $150,000

SBA 7(a) Interest Rates, Penalties, and Fees

Right now, SBA 7a loans are set at the interest rates found on the chart below: 


If you're a business owner who finds that their business is going even more smoothly than expected, you might be tempted to pay back your entire SBA 7(a) loan (or a large portion of it) at once. However, making early payments on a SBA 7a loan will incur a prepayment penalty within the first three years. In the first year, the penalty is set at 5%, in the second year, it's set at 3%, and in the third year, the prepayment penalty declines to 1%. 

In addition to prepayment penalties, the SBA charges borrowers a guarantee fee. This varies depending on the exact size of a loan: 

  • Loans $150,000- $700,000: 3%

  • Loans $700,000- $1 million: 3.5%

  • Loans $1 million- $5 million: 3.5%, plus an additional 0.25% for the amount over $1 million.

Borrowers are also required to pay an annual service fee of 0.52% of the loan amount. 

SBA Certified and Preferred Lenders 

While most SBA loans are offered by lenders that are simply approved by the Small Business Administration, some lenders have also been certified by the SBA Certified Lender Program. This cuts down on paperwork and allows most Certified Lender loans to be approved in three business days. Another SBA program, the Preferred Lender Program, allows lenders to make a loan decision without approval from the SBA. In many cases, a potential borrower can be approved for an SBA loan from a Preferred Lender in as little as 24 hours. 

Other SBA Loan Programs 

While the 7(a) loan program is an excellent choice for many small business owners, it's not right for everyone. For businesses looking to get loans up to $350,000, the SBA 7a Small Loan might be a better fit. Just like typical 7(a) loans, 7(a) Small Loans can be used to purchase owner-occupied commercial real estate, to purchase equipment, and to pay for hiring and inventory. However, unlike the regular 7(a) program, the Small Loan Program doesn't require nearly as much analysis of a company's cash flow. This often means loans can be approved much faster.

In contrast, businesses looking for a slightly larger loan (up to $5.5 million) to fund larger commercial real estate projects may want to look into the SBA 504 Loan. This loan is designed specifically for purchasing existing properties, expanding current commercial real estate projects, and funding new construction for small businesses. 

Commercial Real Estate Loans. is the partner you need to help your small business truly come to life. Whether you're a small startup or an established company, we have the experience and expertise to give your business more financing options!