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7(a) loans

The SBA’s most popular loan program caters to financial aid to firms with unique needs.

Content

What is a 7(a) loan?
Am I eligible?
How do I use the 7(a) loan?
What do I need to apply?
How do I pay back my 7(a) loan?
Existing borrowers

What is a 7(a) loan?

7(a) Loan Program is SBA’s one of the most popular loan programs and it takes care of businesses with special requirements and provides them with financial assistance as per requirement. When buying real estate as part of a business, this is the greatest choice, although it can also be used for:

  • Working capital, both short- and long-term
  • Refinance of your company’s present debts
  • Any furniture, fixtures, and supplies needed


A 7(a) loan has a maximum lending amount of $5 million. What the business does to earn money, its credit history, and where it operates are all important eligibility factors. Your lender will assist you in determining which sort of loan is best suited to your requirements.

Am I eligible?

Businesses must meet the following criteria to be eligible for 7(a) financial assistance:

  • To be deemed a small business, you must operate for profit, as defined by the SBA.
  • Be doing business in the United States or its possessions, or plan to do so.
  • Have a reasonable amount of money in the bank.
  • Before seeking financial aid, consider other financial options, such as personal assets.
  • Be able to show that you require a loan.
  • Use the money for a good business venture.
  • You must not be in arrears on any existing debts to the US government.


Some companies may not be eligible for a 7(a) loan. More information on the terms, conditions, and eligibility can be found here.

How do I use the 7(a) loan?

The 7(a) loan can be used for a variety of purposes:

  • For both categories of working capital long-term and short-term.
  • Revolving funds based on the value of existing inventory and receivables.
  • To purchase any missing equipment, machinery, furniture, fixtures, supplies, materials, etc.
  • The acquisition of property, such as land and buildings.
  • The construction of a new structure or the refurbishment of an old structure.
  • Launching a new business or assisting with the purchase, management, or development of an existing one.
  • Under some conditions, even refinancing current corporate debt is possible.

What do I need to apply?

You’ll need to acquire the necessary documentation once you’re ready to sign up. Begin by working with a local lender who follows SBA criteria. Your lender will deliver your loan package to the SBA once it is complete. To make sure everything required is available, it is recommended that you use the following checklist:

  • Borrower information form: Fill out SBA Form 1919 and send it to an SBA-approved lender.
  • Financial statements and Background: Complete both the SBA Form 912 (statement of personal history) and the SBA Form 413 (statement of financial information) (personal financial statement). These documents enable the SBA and all the key stakeholders in determining whether you are eligible.
  • Business financial statements: To demonstrate your ability to repay a loan, provide the following financial statements:
    • Profit and loss statement – Within 180 days of your application, provide a profit and loss statement. Complementary schedules from the previous three fiscal years should also be included.
    • Projected financial statements – Include a thorough one-year income and financial projection, as well as an explanation of how you plan to meet this goal.
  • Affiliation and ownership: A list of all personal details of subsidiaries and affiliates, including concerns must be mentioned, in which you own a shareholding and are either way associated with you.
  • Business license or certificate: Give a clear copy of the original business license or certificate. Put your company seal on the SBA loan application form if your small business is a corporation.
  • History of loan applications: Include every previous loan application you may have made.
  • Income tax returns: Add verified personal and business federal income tax returns from your company’s principals for the previous 3 years.
  • Resumes: Personal resumes for each principal should be included.
  • Overview and history of the company: Give a brief history of the company and its issues. Include a description of why you require the SBA loan and how it will benefit your company.


Collect the following important information if you’re buying an established business:

  • Profit and loss statement and current balance sheet
  • Returns for the past three years’ federal income taxes
  • The terms of the sale are included in the proposed bill of sale
  • Inventory, machinery, and equipment, as well as furnishings and fixtures, are all included in the asking price
  • Agreements for franchises, jobbers, or licensing
  • Evidence of a capital injection


Based on the exact use of funds or fees paid on a loan package or to a broker or agent, you may be needed to file extra SBA forms.

How do I pay back my 7(a) loan?

The length of time it takes to repay a loan depends on a number of things.

  • The majority of 7(a) term loans are repaid in monthly principal and interest payments.
  • Fixed-rate loans have the same repayments because the interest rates are set.
  • Once the interest rate on a variable rate loan varies, the lender may need a different payment amount.

Existing borrowers

Existing borrowers can use the SBA’s Capital Access Financial System (or CAFS) to track the progress of their loans. Get information on how to set up an account.

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