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Loan type

SBA 7(a) Loan

The most flexible SBA loan, for almost any business purpose.

Run the numbers How to apply

Loan size
Up to $5 million
Term
Up to 10 years; up to 25 years for real estate
SBA guarantee
85% up to $150,000; 75% above that
Rate
Negotiated, capped by SBA (variable: base rate + 3% to 6.5% depending on size)
Upfront fee
2% to 3.75% of the guaranteed portion (FY 2027)
Best for
Buying a business, working capital, equipment, real estate, refinancing

What it is

The SBA 7(a) is the Small Business Administration's workhorse loan. A bank or other approved lender makes the loan, and the SBA guarantees a large share of it. That guarantee is what lets lenders say yes to businesses that might not qualify for a conventional loan, usually with longer terms and smaller down payments.

Because one program covers so many uses (working capital, equipment, real estate, buying a business, and refinancing certain business debt), it is the first loan most small business owners should price out, even if they end up choosing another product.

SBA upfront fee, as a share of the guaranteed portion (FY 2027)
Loans up to $150,0002%
$150,001 to $700,0003%
Over $700,0003.5% on the first $1M guaranteed, 3.75% above3.5% to 3.75%

Source: SBA Information Notice 5000-881797. Manufacturers, certain food-supply-chain businesses and rural businesses pay 0% on loans of $700,000 or less.

How a $350,000 loan is shared
  • SBA guarantees (75%)$262,500
  • Lender carries (25%)$87,500

The guarantee protects the lender if the loan goes bad. You still owe the full balance.

A good fit if you want

  • Buying or starting a business
  • Longer repayment terms that keep monthly payments lower
  • Businesses that fall just short of conventional lending standards
  • Mixed-use needs in one loan: equipment, working capital and real estate

Probably not the right tool if

  • Very small amounts, where a microloan or credit line may be simpler
  • Borrowers who need money in days, not weeks
  • Passive real-estate investing or other ineligible business types

Typical requirements

  • For-profit business operating in the U.S. that meets SBA size standards
  • Owners with 20% or more typically sign a personal guarantee
  • Owner equity in the business and a clear repayment story (see DSCR)
  • Unable to get credit on reasonable terms elsewhere (the "credit elsewhere" test)
  • Current on taxes and any federal debt

Run the numbers

These calculators run in your browser and are estimates, not offers. Change any number to see the effect.

How to apply

  1. Check eligibilityConfirm your business type, size standard and owner requirements before spending time on paperwork.
  2. Find a lenderStart with your own bank, then use SBA Lender Match or a Preferred Lender, which can approve without sending the file to the SBA.
  3. Gather documentsPlan on SBA Form 1919, a personal financial statement (Form 413), 3 years of business and personal tax returns, current financial statements, a debt schedule and a business plan or projections for new ventures.
  4. Submit and underwriteThe lender reviews credit, cash flow and collateral and may ask follow-up questions. Fast responses keep the file moving.
  5. ApprovalStandard 7(a) loans over $350,000 are reviewed by the SBA in about 5 to 10 business days unless the lender has delegated authority; smaller loans move faster.
  6. Close and fundReview the final terms, sign, and fund. Expect the closing to take a few weeks end to end.

Need a lender, an SBA district office or a free counselor? Use the national directory.

Common questions

Is an SBA loan from the government?

No. The lender makes the loan; the SBA guarantees part of it to reduce the lender's risk.

Who pays the SBA fee?

The lender pays the upfront guaranty fee to the SBA and may pass it on to the borrower. The lender's annual service fee cannot be passed on. Manufacturers, certain food supply chain businesses and rural businesses can pay 0% upfront on loans of $700,000 or less.

Is there a prepayment penalty?

For loans with maturities of 15 years or more, paying off 25% or more of the balance in the first three years carries a fee of 5%, 3% and 1% of the amount prepaid in years one, two and three.

Fixed or variable rate?

Either. Variable-rate loans are priced off a base rate such as prime plus a spread that cannot exceed the SBA maximum for the loan size.

Keep reading

Sources

General information, not financial, tax or legal advice. LoansFlow is not a lender and this is not an offer of credit. Program rules, limits, fees and rates change; confirm current terms with your lender and the issuing agency. SBA figures reflect SBA.gov and the fiscal year 2027 fee notices (effective October 1, 2026).