What Is an SBA 7a Loan?

Alright, so imagine one of those really awesome Swiss Army Knives, with all the gadgets and gizmos that you can use for almost anything.

Okay…

Yeah, it’s like one of those.

That’s your analogy?

Hey, you try coming up with witty jokes and clever metaphors all day!

Fair enough. So – a Swiss Army Knife.

Right. So an SBA 7a loan is the Swiss Army Knife of the SBA loan world. It’s the most common type of SBA loan, and for good reason: it offers flexible financing that can be used for all your business needs. Literally, if a cost is for your business, you can use an SBA 7a to buy it, lease it, or refinance it. You can borrow any amount from $50,000 to $5,000,000, to be paid back over either a 10-year or 25-year term on a monthly basis. An SBA 7a loan also has all the advantages of any SBA loan – the Small Business Association covers a percentage of the loan risk, giving banks an incentive to work with you and offer you traditional bank rates even when you wouldn’t otherwise qualify for a bank loan.

Wow, could it get any better?

Not really. But as with all loan options, there is no one-size-fits-all.

SBA 7a loans are awesome because they provide:

  • Fairly long terms
  • Wide variety of uses
  • Bank rates without bank hassle

 

But SBA 7a loans aren’t perfect for everyone because:

  • They’re the hardest alternative loans to qualify for
  • They have a longer time to funding
  • They require a paperwork-intensive application

 

You should also note that there’s an SBA 7a real estate loan for property purchases or refinancing, which comes with 25-year terms, monthly payments, and 85% financing on your project.

So it really is like an all-purpose knife after all.

Yep. You can even use it to cut ahead of your competition.

You’re really struggling here, aren’t you?

That we are.