SBA 7(a) loans

Janover Capital editorial team · Checked November 9, 2026

Short answer

A 7(a) loan is SBA's main business loan. A private lender makes it, and SBA guarantees part of it. The maximum is $5,000,000. The guaranty is 85% on loans of $150,000 or less and 75% on larger loans (SOP 50 10 8.1, Sec. B, Ch. 1; App. 16).

Maximum loan: $5,000,000
Maximum SBA guaranty: $3,750,000
Minimum coverage, Standard 7(a): 1.15:1
Working capital term: Up to 10 years

Key facts

SBA 7(a) loans: key facts
Fact	Value
Maximum loan	$5,000,000
Maximum SBA guaranty	$3,750,000
SBA guaranty share	85% or 75%, by loan size
Minimum coverage, Standard 7(a)	1.15:1
Maximum variable rate	Prime plus 3.0 to 6.5 percentage points, depending on loan size
Working capital term	Up to 10 years
Equipment term	10 years, or up to 15 years if the IRS asset class useful life supports it
Real estate term	25 years, plus any reasonable construction or renovation period
Startup equity	at least 10% of total project costs
Who you apply to	A private lender, not SBA

What a 7(a) loan is

A 7(a) loan is a loan from a private lender that SBA partly guarantees. SBA calls 7(a) its primary business loan program (sba.gov/loans/7a-loans, read November 8, 2026). If a borrower defaults, the lender may ask SBA to buy the guaranteed portion (sba.gov/sba-lenders, read November 8, 2026).

You apply to the lender. SBA says you will always work directly with your lender and not with SBA (sba.gov/loans/7a-loans). The lender negotiates the rate with you, up to SBA's maximum (App. 18, Para. A.1).

The current rules are in SOP 50 10 8.1, effective October 1, 2026. Section and appendix citations below refer to that document.

The loan types inside the program

7(a) is a family of loan types. Each one follows the core rules in Section A, then adds its own.

Standard 7(a). Loans more than $350,000, up to $5,000,000 (Sec. B, Ch. 1).
7(a) Small. Term loans up to $350,000 per project, counting other 7(a) loans made within 90 days (Sec. B, Ch. 2, Para. B.1).
SBA Express. Loans and lines up to $500,000, with a 50% guaranty. The lender decides (Sec. B, Ch. 2).
MARC. Revolving loans up to $5,000,000 for manufacturers and $2,000,000 for other eligible industries, such as wholesalers (Sec. B, Ch. 3, Para. B.1).
CAPLines. Lines for short-term and cyclical needs, up to $5,000,000 (Sec. B, Ch. 4).
Export loans. Export Express, the Export Working Capital Program and International Trade loans (Sec. B, Ch. 5).
7(a) Working Capital Pilot. Monitored lines up to $5,000,000. The pilot runs August 1, 2024 through July 31, 2027 (89 FR 57353).

What the money can pay for

SBA lists these uses (sba.gov/loans/7a-loans, read November 8, 2026):

Buying, refinancing or improving real estate and buildings.
Short-term and long-term working capital.
Refinancing current business debt.
Buying and installing machinery and equipment, including AI-related expenses.
Furniture, fixtures and supplies.
Complete or partial changes of ownership.
Any mix of these in one loan.

SBA also bars certain uses (Sec. A, Ch. 3, Para. B):

Past-due payroll, sales or similar taxes held in trust.
Floor plan financing.
Property held for future development, sale, lease or investment, with exceptions for Eligible Passive Companies and Builders CAPLines.
Payments to a creditor in a position to sustain a loss that would shift to SBA.

Working capitalMoney for day-to-day costs such as payroll, rent and inventory. Full definition proceeds may not pay off existing debt (Sec. A, Ch. 3, Para. A.2.d). Debt payoffs follow Appendix 14, and business purchases follow Appendix 15. The SOP allows revolving lines only under SBA Express, CAPLines, EWCP, MARC and Export Express (Sec. A, Ch. 3, Para. B.4). The 7(a) Working Capital Pilot also delivers revolving lines, under a waiver SBA published for that pilot (89 FR 57353).

Who qualifies

SBA says a business must meet these tests (sba.gov/loans/7a-loans, read November 8, 2026):

Be an operating business that operates for profit.
Be located in the United States.
Be small under SBA size requirements.
Not be a type of ineligible business.
Be creditworthy and show a reasonable ability to repay.

Four more rules to check:

Credit elsewhere: the desired credit must not be available on reasonable terms from non-federal, non-state and non-local government sources (13 CFR § 120.101).
Size: SBA uses the size standard for the applicant's primary industry in 13 CFR 121.201, measured in annual receipts or employees. An alternative test also works (13 CFR § 121.301(b)(2)). It allows tangible net worth of $20 million or less and average net income of $6.5 million or less.
Ownership: owners and guarantors must meet SBA's citizenship and residency rule. For example, lawful permanent residents may not own any percentage of the applicant (Sec. A, Ch. 1, Para. F).
Franchises: a brand that meets the FTC definition of a franchise must be on the SBA Franchise Directory to obtain SBA financing (Sec. A, Ch. 1, Para. G.5).

How much SBA guarantees

The guaranty is 85% on loans of $150,000 or less and 75% on larger loans (App. 16, Para. A.1). On most 7(a) loans, SBA's guaranty to one business and its affiliates cannot exceed $3,750,000 (13 CFR § 120.151). 7(a) loans approved within 90 days of each other are combined to test the $150,000 line (App. 16, Para. A.1.d).

The guaranty protects the lender. You still owe the full loan, and each person owning 20% or more of the business gives an unlimited personal guaranty (Sec. A, Ch. 5, Para. A.1).

Rates and fees

The maximum variable rate depends on the loan size (13 CFR § 120.214(d)):

$50,000 or less: Prime plus 6.5 percentage points.
$50,001 to $250,000: Prime plus 6.0 percentage points.
$250,001 to $350,000: Prime plus 4.5 percentage points.
Over $350,000: Prime plus 3.0 percentage points.

With Prime at 7.00% as of Nov 10, 2026, those caps run from 10.00% to 13.50%. The same spreads apply if the base rate is SBA's Optional Peg Rate (App. 18, Para. A.2). A lender can also use SOFR, the 5-year Treasury Note rate or the 10-year Treasury Note rate. Even then, the all-in rate is still capped at Prime plus the spread for the loan size (App. 18, Para. A.2). A fixed rate can reach the Prime rate on the first business day of the month plus an allowable spread that SBA publishes (App. 18, Para. A.1). SBA does not allow balloon payments (13 CFR § 120.214(e)).

SBA charges the lender a guaranty feeA fee SBA charges on the guaranteed part of a loan. The lender pays it and may pass it to you. Full definition, and the lender may pass it to you (Sec. A, Ch. 4, Para. C.1.a). For loans approved October 1, 2026 through September 30, 2027, the fee depends on loan size (Information Notice 5000-881797):

$150,000 or less: 2% of the guaranteed portion.
$150,001 to $700,000: 3% of the guaranteed portion.
Over $700,000: 3.5% of the guaranteed portion up to $1,000,000, plus 3.75% of the guaranteed portion over $1,000,000.
Maturity of 12 months or less: 0.25% of the guaranteed portion.
Waiver: 0% for loans of $700,000 or less to manufacturers (NAICS 31-33), listed food supply chain businesses and businesses in rural areas.

The lender also pays SBA 0.55% of the outstanding guaranteed balance, and it may not pass that fee to you. Lenders may not charge commitment, origination, broker, referral and similar fees, points, prepayment fees and renewal fees (Sec. A, Ch. 4, Para. C.4).

A loan of 15 years or more can carry a prepayment fee owed to SBA (13 CFR § 120.223). It applies when you voluntarily prepay more than 25% in one of the first three years. The fee is 5%, 3% and 1% of the prepaid amount in years one, two and three. See how that test works, or estimate your guaranty fee.

How long you can borrow

The term must be the shortest appropriate term based on the use of proceeds and the borrower's ability to repay (App. 17, Para. A). The maximums depend on the use:

Working capital or inventory: 10 years.
Equipment, fixtures or furniture: 10 years, or up to 15 years if the IRS asset class useful life supports it.
Real estate: 25 years, plus any reasonable construction or renovation period.
Leasehold improvements: 10 years, plus up to 12 months to complete the improvements.
Mixed uses: a blended maturity, or up to 25 years if 51% or more of the proceeds are for real estate.
Changes of ownership: 10 years of amortization, with only the real estate portion allowed up to 25 years on a blended basis (App. 15, Para. B.1).

What lenders and SBA check

Cash flow is the primary source of repayment, not collateralProperty a lender can take and sell if a loan is not repaid. (Sec. B, Ch. 1, Para. C). If cash flow cannot repay the loan, the request must be declined.

Coverage. A Standard 7(a) loan needs debt service coverage of at least 1.15:1, and 1:1 on a global basis (Sec. B, Ch. 1, Para. C.2). A 7(a) Small loan needs 1.10:1 (Sec. B, Ch. 2, Para. C.2). Business purchases follow Appendix 15.
Equity. A startup needs at least 10% of total project costs. SBA treats a business as a startup when it has been in operation for 1 year or less (Sec. B, Ch. 1, Para. C.2.b).
Collateral. A Standard 7(a) loan must be fully secured, as SBA defines that term (App. 19, Para. B.1). Even so, a loan request must not be declined solely because collateral is inadequate (App. 19, Para. A). A 7(a) Small loan of $50,000 or less requires none (App. 19, Para. B.2).
Credit score. SBA sets no minimum credit score; the lender applies its own credit standards (Sec. B, Ch. 2, Para. C.2).

How the decision gets made

A lender can submit a Standard 7(a) loan two ways (Sec. B, Ch. 1, Para. C.1):

Non-delegated. The lender sends the application to SBA. SBA makes the final decision on eligibility and creditworthiness.
Preferred Lender (PLP). The lender analyzes the credit under its delegated authority. SBA does not review that analysis before it issues a loan number.

SBA lists a turnaround time of 5-10 business days for Standard 7(a) loans (sba.gov/sba-lenders, read November 8, 2026). SBA lists a turnaround time of 2-10 business days for 7(a) Small loans (sba.gov/sba-lenders, read November 8, 2026). Those figures describe SBA's own turnaround. They do not describe how long a lender takes.

What this page cannot tell you

Lenders apply their own credit policies on top of SBA's rules, so rates, fees and collateral demands vary by lender. SBA's public 7(a) loan file lists approved loans only. It holds no applications and no declines, so it cannot show how many requests were turned down. We do not estimate approval odds.

When another program fits better

You need a small amount. A microloan goes up to $50,000 and comes from an intermediary lender.
You are buying a building or long-lived equipment. A 504 loan offers long-term, fixed-rate financing.
You want a lender-decided loan or line. Look at SBA Express.
Your need is seasonal or tied to a contract. Look at CAPLines.
A declared disaster hit your business. SBA disaster loans come directly from SBA.

Sources

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