SBA 7a Loan Eligibility

SBA 7a Loan Eligibility

The SBA 7a loan is designed to provide long-term financing to existing and start-up businesses. Unlike the SBA 504 loan program, the SBA 7a program is structured like a conventional loan in that only a first trust deed is established. The SBA guarantees a portion of the SBA 7a loan, making it a simpler qualification process.

Qualifying for a SBA 7a as an existing businesses:

  • Historical cash flow sufficient to service requested debt or cash flow ability based on reasonable projections.
  • Reasonable personal credit of principal borrowers.
  • Secondary source of repayment- either collateral equal to loan amount or co-signer with reasonable credit and income to repay loan
  • Historical earnings sufficient to cover personal living expenses
  • For profit companies only
  • Must operate in the United States or its possessions

SBA 7a qualification for Start-up businesses (established for less than 2 years):

  • Management experience in industry (2 years minimum)
  • Capital injection (30% of total project)
  • Acceptable business plan, projections and assumptions upon which projections are based.
  • Maximum loan amount – $5,000,000
  • Terms – 7 to 10 years
  • Interest rate – prime + 2.25% to 2.75% (variable)
  • For profit companies only
  • Must operate in the United States or its possessions

Learn more about the SBA 7a Loan Program