SBA 7(a) Loan - A complete guide for Small Business Administration SBA 7(a) Loan Program

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What is the SBA 7(a) Loan Program

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The 7(a) Loan Program is the SBA's primary method to assist small businesses in the U.S.

When you apply for an SBA 7(a) loan, you work with a private lender like Merchant Cash Advance 360 and the SBA joins by securing a portion of the loan amount, capping interest rates, and limiting fees.

This guarantee from a government agency helps business owners acquire funds, even if they may not have otherwise qualified for other bank loans.

These loans can be used to acquire business essentials like real estate, equipment, working capital, and inventory.

In this blog, we will look into the qualification, rates, and some different examples of SBA 7 a loan program.

Who can apply for SBA 7 (a) Loan Program

The small business administration or SBA provides loans to businesses - not individuals. So, the requirements of eligibility are based on regards of the business, not the owners.

All businesses that are considered for financing under SBA's 7(a) loan program must meet SBA size standards, be for-profit, not already have the internal resources (business or personal) to provide the financing and be able to demonstrate repayment.

Certain variations of SBA's 7 (a) loan program may also require additional eligibility criteria. Special purpose programs will identify those additional criteria.

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For more detailed eligibility requirements of 7 (a) loan, please fill up this application or call @ +1 (888) 528-0045 for more information.

$50,000
3 Years
$30,000
1 Year

To apply, you will provide a handful of information and documents about your business and yourself.

What are the interest rates on Small Business Administration 7 (a) Loan

The SBA introduces interest rate guidelines for lenders, which helps keep small-business borrowing costs low. The interest rates for SBA 7(a) loans are the daily prime rate, which changes based on actions taken by the Federal Reserve, plus a lender's fee.

The lender's fee is negotiated between the borrower and the lender and can result in either fixed or variable interest rates. However, the SBA caps the maximum lender's fee that lenders can charge based on the size and maturity of the loan.

INTEREST RATES

  • Prime + 4.25% for loan of $25,000 or less.
  • Prime + 3.25% for loans of $25,001 - $50,000.
  • 2.25% for loans more than $50,000.

The current prime rate, as of January 2021, is 3.25%.

TERMS

  • Up to 25 years for real estate.
  • Up to 7 years for working capital.

COLLATERAL REQUIREMENTS

  • Required for loans over $25,000
  • If you don’t have sufficient collateral to secure the loan, the SBA won’t turn down your request based on this fact if you meet all other qualifications.

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