An SBA 7(a) loan is a government-backed small business loan that provides up to $5 million in flexible financing for working capital, equipment, real estate, and business expansion.
The U.S. Small Business Administration (SBA) guarantees a portion of each loan to reduce lender risk, making capital more accessible for qualified businesses. Created under Section 7(a) of the Small Business Act, this program is widely used for growth initiatives, business purchases, and refinancing existing debt.

When to use an SBA 7(a) loan.

SBA 7(a) loans are designed to support a wide range of business needs, especially those that improve long-term financial health or strengthen the business’s ability to grow.

Loan proceeds can be used for working capital, expansion, equipment, real estate, acquisition, or refinancing existing debt under qualifying conditions.

What SBA 7(a) loan funds can be used for.

Working capital and operations

  • Operating expenses
  • Inventory purchases
  • Seasonal cash-flow gaps

Equipment and asset purchases

  • Purchasing new or used equipment
  • Equipment installation and upgrades
  • Buying furniture, fixtures, technology, or supplies

Real estate projects

  • Purchasing owner-occupied commercial real estate
  • Refinancing existing owner-occupied real estate
  • Building a new facility
  • Renovating or expanding an existing property

Business acquisition or expansion

  • Buying an existing business
  • Funding startup costs (in eligible cases)
  • Expanding a current business
  • Changes of ownership, when structured and SBA-approved
  • Multiple-purpose loans, such as partial acquisition and working capital

Refinancing existing business debt

SBA 7(a) loans can consolidate or refinance business debt when the refinancing improves cash flow or meets SBA benefit requirements.

What SBA 7(a) loan funds cannot be used for.

Loan proceeds from SBA 7(a) loans cannot be used for purposes that do not benefit the business directly, or do not meet the SBA’s lending standards. Ineligible uses include:

  • Paying off or refinancing an existing SBA loan
  • Buying out a partner, unless part of SBA-approved ownership change structure
  • Paying delinquent federal or state withholding taxes
  • Payments or distributions to business owners that do not serve a business purpose
  • Any purpose that the SBA deems not sound, speculative, or primarily personal

Eligibility requirements for SBA 7(a) loans.

Most U.S. small businesses can qualify for an SBA 7(a) loan if they meet SBA standards for location, business purpose, size, and creditworthiness. The SBA sets nationwide rules for who is eligible, while individual lenders may have additional requirements. Your business must meet all of the following SBA criteria to be eligible.

1. Business type and status

  • Must be a for-profit business
  • Must be actively operating
  • Must operate within the United States or U.S. territories‍
  • Must be in an eligible industry

2. Business size standards

Must meet the SBA’s definition of a small business. The SBA defines a small business based on industry-specific size standards that consider factors like annual revenue and number of employees.

3. Ability to repay

  • Must demonstrate sufficient cash flow to support loan payments
  • Personal credit history and business financials must show responsible borrowing behavior

4. Equity and owner participation

  • 100% of direct and indirect owners and guarantors must be U.S. citizens, U.S. nationals, or lawful permanent residents ("green card" holders)
  • The business must show reasonable owner equity investment
  • Owners with over 20% ownership must provide:
    • Unlimited personal guarantee
    • Financial disclosures

5. Use of proceeds

  • SBA loan proceeds must be used for sound business purposes
  • Must not be used for ineligible or personal purposes (see When to Use an SBA 7(a) loan)

6. Exhaustion of other financing options

Borrowers must demonstrate that they are unable to obtain credit elsewhere on reasonable terms.

Ineligible businesses.

Certain business types cannot qualify for SBA loans, including:

  • Nonprofit organizations
  • Financial businesses primarily engaged in lending
  • Real estate investment firms not occupying property
  • Businesses engaged in illegal activities
  • Pyramid sale distribution plans
  • Certain restricted membership organizations, such as private clubs
  • Speculative or investment-based ventures

Common disqualifiers for SBA 7(a) loans.

A borrower may be ineligible for a 7(a) loan if:

  • The business or owner has delinquent federal debt
  • The owner has recent criminal activity (the SBA evaluates case-by-case)
  • The business cannot demonstrate ability to repay
  • Loan proceeds would be used for ineligible purposes
  • Insufficient equity injection for acquisition or startup funding
  • Some or all of the owners or guarantors are not U.S. citizens, U.S. nationals, or lawful permanent residents

Lender-driven requirements for SBA 7(a) loans.

In addition to the SBA program rules, lenders typically layer on additional requirements:

  • Minimum personal credit score (often 640-680+)
  • Minimum time in business (often 2+ years, but this can vary)
  • Minimum revenue thresholds
  • Collateral requirements for loans over a certain size
  • Bank statement health, including consistent cash flow

These requirements are not SBA rules, but instead are lender underwriting standards.

Learn more about SBA loan eligibility

For a deeper breakdown, including full disqualifier lists, industry restrictions, and eligible use of proceeds, read our complete guide to SBA loan eligibility requirements.

Types of SBA 7(a) loans.

The SBA offers several loan programs under the 7(a) umbrella, each designed to serve different business needs. These factors include loan size, speed of funding, working capital structure, or international trade.

When choosing a 7(a) loan type, consider:

  • How much funding you need
  • How quickly you need the funds
  • Whether you need a term loan, or line of credit
  • Your intended use of the loan proceeds

Below is an overview of the primary SBA 7(a) loan types, followed by a explanations of each.

SBA 7(a) loan types at a glance
Loan type Max loan amount SBA guarantee Best for
Standard 7(a) $5 million 75-85% General business needs, real estate, expansion
7(a) small loan $350,000 75-85% Smaller funding needs
SBA Express $500,000 50% Faster funding decisions
Export Express $500,000 75-90% Export-related financing with faster funding decisions
Export Working Capital (EWCP) $5 million 90% Export-driven working capital
International Trade $5 million 90% Small businesses competing in international markets
CAPLines $5 million 75-85% Revolving working capital
7(a) Working Capital Pilot (WCP) $5 million 75-85% Asset-based monitored credit lines

Note:Loan terms typically range up to 10 years for working capital and up to 25 years for real estate.

Standard SBA 7(a) loan

The standard 7(a) loan is the SBA’s most common and flexible loan option.

Best used for:

  • Working capital
  • Equipment and supplies
  • Owner-occupied real estate
  • Business expansion or acquisition

Key features:

  • Loan amounts from $350,000 to $5 million
  • SBA guarantees 85% of loans up to $150,000 and 75% for larger loans
  • Collateral is required
  • SBA provides final approval before issuing a loan number

7(a) small loan

The 7(a) small loan is designed for businesses that need a smaller amount of financing, but want the benefits of SBA backing.

Key features:

  • Maximum loan amount: $350,000
  • Same guarantee structure as Standard 7(a) loans
  • No collateral required for loans under $50,000
  • Faster processing compared to larger SBA loans

SBA Express loan

The SBA Express loan prioritizes speed and convenience, with much faster approval and processing times than traditional 7(a) loans.

Best used for:

  • Businesses that need faster access to capital

Key features:

  • Maximum loan amount: $500,000
  • SBA guarantee: 50%
  • Lenders make eligibility, credit, and collateral decisions under delegated authority from the SBA
  • Response time of 36 hours or less

Export-focused SBA 7(a) loans

The SBA offers three specialized 7(a) programs to support businesses involved in international trade.

Export Express loan

A streamlined option for businesses entering or expanding export operations.

Key features:

  • Maximum loan amount: $500,000
  • SBA guarantee:
    • 90% for loans up to $350,000
    • 75% for larger loans
  • Can be structured as a term loan or revolving line of credit
  • Lines of credit may last up to 7 years
  • 24-36 hour response time

Export Working Capital Program (EWCP)

Designed to fund working capital directly tied to export sales.

Key features:

  • Loan amounts up to $5 million
  • SBA guarantee: 90%
  • Working capital terms up to 10 years
  • Equipment financing up to the useful life of the asset (max 15 years)
  • Real estate terms up to 25 years

International Trade loan

Built for businesses that need to expand exports or modernize operations to compete internationally.

Key features:

  • Loan amounts up to $5 million
  • SBA guarantee: 90%
  • Working capital terms up to 10 years
  • Equipment financing up to the useful life of the asset (max 15 years)
  • Real estate terms up to 25 years

SBA CAPLines

CAPLines are SBA-backed revolving lines of credit designed for businesses with cyclical or short-term working capital needs.

General features:

  • Loan maximums and guarantees align with Standard 7(a) loans
  • Structured as lines of credit rather than lump-sum loans

Types of CAPLines

Working Capital CAPLine

For businesses with accounts receivable and/or inventory that needs asset-based financing.

Contract CAPLine

For businesses performing work under contracts, covering costs tied to specific projects.

Builders CAPLine

For construction contractors and builders financing residential or commercial projects.

Seasonal CAPLine

For businesses with predictable seasonal revenue cycles. These businesses must demonstrate prior seasonal patterns to qualify.

7(a) Working Capital Pilot (WCP) program

The WCP program offers monitored, asset-based lines of credit for certain industries.

Key Features:

  • Loan amounts up to $5 million
  • Available to businesses in manufacturing, wholesale, and professional services
  • Requires at least one year of operating history
  • Requires detailed financial reporting, including inventory and receivables
  • SBA guarantee aligns with standard 7(a) loans

SBA 7(a) loan rates, fees, and repayment terms.

SBA 7(a) loans are structured to support long-term small business growth, with interest rates, fees, and repayment terms designed to balance affordability with lender risk. While the SBA sets maximum limits, the final loan terms are determined by the lender based on borrower qualifications and loan structure.

SBA 7(a) loan interest rates

SBA 7(a) loan interest rates are set by the lender, not the SBA. Rates are based on factors such as:

  • Creditworthiness
  • Loan amount
  • Repayment term
  • Business financial strength

Borrowers may accept, reject, or sometimes negotiate the offered rate with the lender.

How SBA 7(a) interest rates are calculated

Most SBA 7(a) loans use a prime-based interest rate, which may be fixed or variable.

Interest rate formula:

Prime Rate + Lender Markup (capped by the SBA)

As of December 3, 2025, the prime rate is 7.00%. The SBA allows lenders to add a markup, but caps how high the total interest rate can be, depending on loan size and repayment term.

Want current SBA rate caps?

For exact SBA 7(a) rate ranges, monthly caps, and a full explanation of how your rate is calculated, see our guide to SBA loan interest rates.

SBA 7(a) guarantee fees

In addition to interest, SBA 7(a) loans require a one-time SBA guarantee fee. This fee helps offset the cost of the SBA’s loan guarantee and is typically financed into the loan.

How guarantee fees work

  • Fee amount depends on loan size and 7(a) loan type
  • For FY 2025, guarantee fees typically range from 2%-3.5%
  • Fees are assessed only on the guaranteed portion of the loan

See full guarantee fee tables

For a complete breakdown of SBA 7(a) guarantee fees by loan size and year, read our guide to SBA guarantee fees.

Other SBA 7(a) loan fees (and what fees are prohibited)

One of the advantages of SBA loans is fee transparency.

Fees the SBA prohibits

The SBA expressly prohibits lenders from charging most common loan fees, including:

  • Application fees
  • Origination fees
  • Processing fees
  • Renewal fees
  • Brokerage fees

Permitted lender fee

Lenders may charge a flat fee of up to $2,500 per loan, regardless of loan size.

Estimate your SBA 7(a) loan payments

Curious what your monthly payment might look like for an SBA loan?

Use our SBA loan calculator to estimate payments, based on your loan amount, rate, term, and fees.

SBA 7(a) loan repayment terms (maturity)

SBA loans are designed for long-term repayment, with maturity periods tied to the loan’s purpose and the useful life of the assets financed.

‍Loan maturity refers to the total time a borrower has to repay the loan. The final payment is made at the end of the maturity term.

Maximum SBA 7(a) loan terms
Loan purpose Maximum maturity
Real estate Up to 25 years
Equipment Up to 10 years
Working capital/ inventory Up to 10 years

Asset life rule

When SBA 7(a) loans are used to purchase fixed assets, such as real estate, equipment, or commercial property, the loan maturity is limited to the economic life of the asset. This can not exceed 25 years.

Fixed assets are long-term assets that:

  • Are not easily converted to cash
  • Are intended for ongoing business use
  • Include real estate, machinery, and furniture

How SBA 7(a) loans work.

SBA 7(a) loans follow a structured approval process designed to ensure borrowers meet eligibility requirements, and lenders are protected by the SBA’s guarantee. While lenders handle most of the underwriting, the SBA plays a key role in approving and backing the loan.

Below is a step-by-step overview of how the SBA 7(a) loan process works.

Step 1: Define your loan purpose and funding needs

Before applying, you must clearly identify:

  • How much funding you need
  • How you will use loan proceeds
  • Whether the use of funds meet SBA eligibility requirements

Your proposed loan purpose impacts:

  • Loan type
  • Repayment term
  • Collateral requirements
  • SBA approval criteria

Step 2: Confirm your eligibility

Next, you must meet SBA eligibility requirements related to:

  • Business type and size
  • Location and ownership
  • Ability to repay
  • Access to other financing

Lenders typically conduct an initial eligibility review before moving forward.

Step 3: Choose the right SBA 7(a) loan type

Based on funding needs and timing, you’ll select the most appropriate 7(a) loan type:

  • Standard 7(a)
  • 7(a) small loan
  • SBA express
  • Export-focused 7(a) loan
  • CAPLine

The loan type determines:

  • Maximum loan amount
  • SBA guarantee percentage
  • Approval speed

Step 4: Gather required documents

SBA loans require detailed financial documentation, which may include:

  • Business and personal tax returns
  • Financial statements
  • Business debt schedule
  • Business plan, or use of funds explanation
  • Ownership and management details

Having documents prepared in advance can significantly reduce approval time.

Step 5: Apply with an SBA-approved lender

Borrowers apply directly through an SBA-approved lender, not with the SBA itself.

The lender:

  • Reviews creditworthiness
  • Structures the loan
  • Determines collateral requirements
  • Submits the loan to the SBA (or approves under delegated authority where applicable)

Step 6: Lender underwriting and SBA review

Depending on the loan type:

  • Standard 7(a): SBA provides final approval
  • Express/delegated loans: Lender makes approval decision

The SBA then assigns a loan authorization number, which enables funding.

Step 7: Loan closing, funding, and repayment

Once approved:

  • Loan documents are finalized
  • Funds are disbursed
  • Repayment begins according to the agreed term

Borrowers must maintain compliance with loan agreements throughout the repayment period.

How to apply for an SBA 7(a) loan.

To apply:

  1. Choose an SBA-approved lender
  2. Prepare financial and business documentation
  3. Submit an application for review
  4. Respond to underwriting questions
  5. Complete loan closing

Timelines vary, but approvals can take several weeks for standard loans, and as little as a few days for SBA Express loans.

Applying for an SBA loan

Interested in applying for an SBA loan? Read our complete guide to the SBA loan application process.

Bottom line: Is an SBA 7(a) loan right for your business?

An SBA 7(a) loan is one of the most flexible and widely used financing options available to small businesses, offering government-backed funding for working capital, equipment, real estate, expansion, and debt refinancing. With long repayment terms, capped interest rates, and broad eligibility, 7(a) loans are designed to support sustainable business growth rather than short-term cash needs.

While SBA loans require more documentation and a longer approval process than many alternative financing options, they often provide lower costs and longer maturities in exchange. For businesses that can meet eligibility requirements and prepare the necessary paperwork, and SBA 7(a) loan can be a powerful tool for long-term stability and expansion.

Key takeaways:

  • SBA 7(a) loans offer up to $5 million in flexible, government-backed financing
  • Funds can be used for working capital, equipment, real estate, acquisitions, and refinancing
  • Interest rates are prime-based with SBA-imposed caps
  • Repayment terms extend up to 25 years, depending on loan purpose
  • Approval timelines vary by loan type, with Express options available for faster funding‍
  • Strong preparation and documentation significantly improve approval odds

Related resources

Learn more about SBA loans:

Compare SBA financing options:

Estimate your 7(a) loan costs: