Business finance glossary
SBA 7(a) loan
The SBA's flagship small business loan program — government-guaranteed, up to $5 million, with rates near prime.
The SBA 7(a) loan program is the primary federal small business financing program, administered by the Small Business Administration and made by approved lenders (banks, credit unions, CDFIs). The SBA guarantees 75–85% of the loan, reducing lender risk and enabling banks to make loans they would otherwise decline. Maximum loan amount: $5 million. Rates: typically prime + 2.75–4.75% for loans under $50,000, and prime + 2.25–2.75% for larger loans. Maximum terms: 25 years for real estate, 10 years for equipment and working capital. SBA 7(a) loans require a 10% down payment for most purposes. The guaranty fee (paid at closing) ranges from 0–3.5% of the guaranteed portion, depending on loan size and term.