When small business owners think of financing backed by the U.S. government, one of the first programs they encounter is the SBA 7(a) Loan. As the SBA’s primary general-purpose loan program, 7(a) can support a wide range of business uses:working capital, equipment, real estate, changes of ownership, and debt refinance.
This guide explains what the SBA 7(a) loan is, how lenders evaluate and approve it, and how the SBA limits key parts of the deal (loan amount, guaranty percentage, maturity, and maximum interest rates).
What Is an SBA 7(a) Loan?
An SBA 7(a) Loan is a business loan made by a participating lender and partially guaranteed by the Small Business Administration (SBA). The SBA sets program guidelines, but the loan terms are negotiated between the borrower and the lender, subject to SBA requirements.
Offer: What SBA 7(a) Loans Can Be Used For
SBA 7(a) loans can be used for:
- Acquiring, refinancing, or improving real estate and/or buildings
- Short- and long-term working capital
- Refinancing current business debt
- Purchasing and installation of machinery and equipment
- Purchasing furniture, fixtures, and supplies
- Changes of ownership (complete or partial)
- Multiple-purpose loans combining the above
This breadth is why 7(a) is often considered the SBA’s most flexible loan option.
Fund: How SBA 7(a) Loans Are Funded (and Who Provides the Money)
A common misconception is that the SBA lends the money directly. For 7(a), the lender provides the funding, and the SBA provides a guaranty on a portion of the loan, reducing lender risk and expanding access to credit.
A typical workflow looks like this:
- Borrower submits the loan request and documentation
- Lender underwrites the file and structures the loan
- SBA provides a guaranty (based on program rules and structure)
- Lender closes and disburses funds
Underwrites: What Lenders Evaluate (and What SBA Requires)
While each lender has its own credit policy, SBA states that eligible businesses must: be an operating for-profit business located in the U.S., be “small” under SBA size standards, be creditworthy with ability to repay, and be unable to obtain credit on reasonable terms elsewhere (“credit elsewhere” requirement).
In underwriting, lenders commonly focus on:
- Cash flow and repayment ability
- Credit profile and management experience
- Use of proceeds and project feasibility
- Collateral availability (where applicable)
Approves: How Approval Works (and Why Lender Type Matters)
Approval is ultimately a lender credit decision made within SBA program rules. Depending on the lender and delivery method, loans may be processed with different levels of SBA review (for example, some lenders may have delegated authority for certain loans, while others may follow non-delegated workflows).
Practical impact: the lender you choose can influence your timeline, documentation experience, and how smoothly the file moves to closing.
Limits: SBA 7(a) Loan Amounts, Guaranty Percentages, Terms, and Rate Caps
Loan amount limits
SBA states that most 7(a) loans have a maximum loan amount of $5 million, while SBA Express and Export Express have maximums of $500,000.
SBA guaranty percentages
SBA explains that for most 7(a) programs, the SBA guaranty is:
- Up to 85% for loans of $150,000 or less
- Up to 75% for loans above $150,000
- 50% guaranty for SBA Express
- Up to 90% for Export Express, EWCP, and International Trade loans
Maturity (loan term) rules
SBA states 7(a) maturity is generally:
- 10 years or less, unless financing/refinancing real estate or equipment with useful life beyond 10 years
- Up to 25 years (including extensions) for real estate (and certain construction/improvement periods)
SBA loan rate caps (important for SBArates.com readers)
SBA says 7(a) interest rates are negotiated between borrower and lender, but are subject to SBA maximums pegged to Prime or an optional peg rate, and may be fixed or variable.
For variable-rate 7(a) loans, SBA lists the maximums as:
| Loan Amount | SBA Maximum Variable Rate |
|---|---|
| $50,000 or less | Base rate + 6.5% |
| $50,001 to $250,000 | Base rate + 6.0% |
| $250,001 to $350,000 | Base rate + 4.5% |
| Greater than $350,000 | Base rate + 3.0% |
SBARates.com angle: SBA caps define the ceiling. Your lender selection and borrower profile typically determine where you land under that ceiling, so comparing active SBA lenders can materially change your outcome.
Choosing a 7(a) Lender: How SBARates.com Fits
Because lenders negotiate the final rate and structure within SBA rules, your choice of lender often influences:
- How your deal is underwritten (cash flow tolerance, collateral approach)
- Closing speed and documentation requirements
- Rate/fee competitiveness within SBA maximums :contentReference
SBARates.com is built to help borrowers identify and compare active SBA lenders so you can shortlist lenders aligned with your use case (working capital, acquisition, owner-occupied real estate, equipment) and pursue competitive terms within SBA program limits.
📌 Frequently Asked Questions About SBA 7(a) Loans
What types of businesses qualify for SBA 7(a) loans?
SBA says eligible businesses must be operating, for-profit, U.S.-based, meet SBA size standards, be creditworthy with ability to repay, and meet the “credit elsewhere” requirement.
How much can I borrow with an SBA 7(a) loan?
SBA states most 7(a) loans have a maximum loan amount of $5 million, while SBA Express and Export Express have maximums of $500,000.
What can SBA 7(a) loan funds be used for?
SBA lists common uses including real estate acquisition/improvement, working capital, refinancing business debt, equipment and machinery purchases, and changes of ownership.
Does the SBA set the interest rate for 7(a) loans?
SBA says rates are negotiated between borrower and lender, but are subject to SBA maximums pegged to Prime or an optional peg rate. SBA also publishes maximum variable-rate tiers by loan size.
What are the maturity (term) limits for SBA 7(a) loans?
SBA states terms are generally 10 years or less unless financing/refinancing real estate or equipment with useful life beyond 10 years, with a maximum of 25 years for real estate (including extensions).
How do I choose the right SBA 7(a) lender?
Start by matching the lender to your use case (acquisition vs. working capital vs. owner-occupied real estate), then compare timelines, fees/APR, and where pricing lands under SBA’s maximum allowable rates. SBARates.com can help you shortlist active SBA lenders to start those comparisons.