# Can an SBA loan have a 25-year amortization with a 10-year term?

**Short answer:** No. A 25-year schedule on a 10-year term leaves a balance due at maturity, which is a balloon. SBA does not allow balloon payments on 7(a) loans, under 13 CFR § 120.214(e).

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Last checked: 2026-11-08

Many conventional commercial loans pair a long amortization with a shorter term. The remaining balance comes due at maturity, and that balance is a balloon. 13 CFR § 120.214(e) says SBA does not allow balloon payments.

## How SBA ties the schedule to the maturity

SOP 50 10 8.1, Appendix 18, Amortization (about p. 399) says a fixed-rate loan must use a payment that fully amortizes it by the maturity date. Variable-rate loans are typically re-amortized at each rate change for the same reason.

Appendix 15, Para. B.1 (p. 370) states it directly for change of ownership loans. They need a stated amortization and maturity, and may not have a balloon.

## What sets the length

The maximum depends on what the money buys (Appendix 17, Para. A, p. 390):

- **Real estate:** 25 years, plus any reasonable construction or renovation period
- **Working capital and intangibles:** 10 years
- **Equipment:** 10 years, or up to 15 years if the IRS asset class useful life supports it

So a 25-year schedule is available only where the use of proceeds supports 25 years.

## Reading a term sheet

If a quote for a 7(a) loan shows a maturity shorter than its amortization, ask the lender why. It may be describing a non-SBA loan in the same financing. Your Note and the SBA Terms and Conditions control.

## Sources

- [13 CFR § 120.214(e), Amortization](https://www.ecfr.gov/current/title-13/section-120.214)
- [SOP 50 10 8.1, App. 18, Para. A, Amortization (about p. 399)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 15, Para. B.1 (p. 370)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 17, Para. A (p. 390)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)