SBA 7(A) Guaranteed Loan Overview
Eligibility Criteria
All applicants must be eligible to be considered for a 7(a) loan. The eligibility requirements are designed to be as broad as possible in order that this lending program can accommodate the most diverse variety of small business financing needs. All businesses that are considered for financing under SBA’s 7(a) loan program must: meet SBA size standards (under $15 million in net worth and $5 million in average net income), be for-profit, not already have the internal resources (business or personal) to provide the financing, and be able to demonstrate repayment.
Loan Size
Loans of up to $5 million are available.
Percentage of Guarantee
Under the 7(a) guaranteed loan program SBA typically guarantees up to 75% of an eligible bank loan up to a maximum guaranty amount of $3,750,000. The exact percentage of the guaranty depends on a variety of factors such as size of loan and which SBA program is to be used. This will be worked out between the SBA and your bank.
Interest Rate
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Interest rates may be fixed or variable.
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Loans of $50,000 or more must not exceed Prime Plus 2.25 percent if the maturity is less than 7 years, and Prime Plus 2.75 percent if the maturity is 7 years or more.
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Loans of $25,000 - $50.000, maximum rates must not exceed Prime Plus 3.25 percent if the maturity is less than 7 years, and Prime Plus 3.75 percent if the maturity is 7 years or more.
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Loans of $25,000 or less, the maximum interest rate must not exceed Prime Plus 4.25 percent if the maturity is less than 7 years, and Prime Plus 4.75 percent, if the maturity is 7 years or more.
Terms
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Real estate and equipment – 25 years
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Working capital - 7 years
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