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7(a) Loan Guarantee

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These loans are very flexible and can be used to finance such business needs as expansion, equipment purchases, leasing, purchase of inventory and real estate or for working capital. Terms up to 25 years. Commercial Real Estate Loans are restricted to the building or purchase of business premises. Terms up to 25 years.

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  • Purchase of vehicles for a courier company
  • Purchase of inventory for a retail operation
  • Working capital for any business
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  • Fit the SBA definition of a small business (under 500 employees or less than $7.5 million in annual sales)
  • Be an eligible business (most are but check with us)
  • Must be a for-profit business registered in the U.S., or planning to do business in the U.S.
  • Must have previously accessed other forms of funding, at the very least including personal assets
  • Show how the money will establish or expand business operations
  • Must create or retain jobs and may need to meet other SBA policy goals

If you're confused or need clarification about the qualifying requirements for the SBA 7(a) Loan Program, please contact us. We'll be happy to help.

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facts 7(a)


  • Set payments at regular intervals
  • Can be used for a wide variety of purposes
  • Relatively low interest rate
  • Long repayment schedule
  • Lengthy application process
  • May carry early payment penalty
  • Variable interest rates may increase

Disclaimer: The above information is provided as a guideline. Some loan conditions may fall outside of these parameters. We recommend that you speak with one of our advisors before taking any course of action based on this information.

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SBA Loans are very popular for the amount of financing they can provide, and for their relatively low interest rate, however they can be challenging to obtain. Big Think Capital is here to help. Start with this guide, then contact us if you believe your business will qualify for an SBA Loan.

Rates, Terms and Limits

Interest rates range from 5.75% to 8.25%, depending upon such factors as your credit score and the term of the loan. Both fixed and variable rate loans may be available. In addition to interest, SBA guarantee fees, packaging fees and closing costs will apply. In many cases, the lender will include these fees in the loan, but be aware that this is additional debt you are incurring.

The maximum loan amount under this program is $5 million. While there is no set minimum most lenders will not consider loans of less than $30,000. The average loan amount is between $350,000 and $400,000.

SBA 7(a) loans for the purchase of real estate will usually have a 25 year term. Loans for other purposes will, in most cases, have a maximum term of 10 years.

SBA 7(a) Guarantee Fees

7(a) loans come with a fee that is based on your loan’s maturity. The lender will initially pay the fee, but they do have the option to pass that fee on to the borrower. These fees can range from 0 percent for loans under $150,000 to 3.5 percent for loans over $700,000. There’s an additional 0.25 percent fee on any guaranteed portion over $1 million.


Limited to loans of $350,000 or less, the express loan program can greatly speed the process of applying for a 7(a) loan. Expedited processing guarantees a response to your loan application within 36 hours. In practice, what this means is that the SBA will notify your lender within 36 hours if you are approved for an SBA guaranteed loan. Your lender may still require a significant amount of time to complete their internal loan application process, approve the loan and advance funds. Interest rates on Express Loans may be higher, with rates up to Prime + 6.5% for loans under $50,000 and up to Prime + 4.5% for loans over $50,000.

As of the time of this writing, the guarantee fee for loans under $150,000 is being waived by the SBA.


To help businesses in underserved markets get access to financing the SBA offers the Community Advantage Loan Program, which guarantees up to 85% of these loans, further reducing the risk to lenders. Limited to loans up to $250,000, these loans are available to businesses that meet the SBA criteria but which may not qualify for a standard 7(a) loan due to low earnings or lack of collateral.

Qualifying businesses include those with more than 50% of their work force residing in low to moderate income communities, Empowerment Zones and Enterprise Communities and HUBZones. In addition, some startups (in business less than 2 years) may qualify regardless of worker residence parameters, as well as veteran-owned businesses and those that would be eliglble for Patriot Express.