Today’s interest rates for all SBA loans
Check Today's Rates →
What Is the SBA 7(a) Loan Maximum Amount?
The maximum amount for an SBA 7(a) loan is $5 million, but other programs have different maximum amounts. Here’s a breakdown of maximum SBA loan amounts.
The maximum amount for an SBA 7(a) loan is $5 million, but other programs have different maximum amounts. Here’s a breakdown of maximum SBA loan amounts:
Standard 7(a) loan – $5 million
Export Working Capital Program loan – $5 million
Export Express loan – $500,000
Small 7(a) loan – $350,000
SBA Express loan – $350,000
What is the maximum amount of an SBA 7(a) loan?
The maximum amount of an SBA 7(a) loan is $5 million. If you borrow the maximum, the SBA will be funding $3,750,000 of the loan and your private lender will cover the rest.
For smaller loans, it might be a good idea to check out one of the SBA's other loan programs, like the 7(a) Small Loan or the Express Loan. Alternately, if you need more than the max amount of $5 million, the SBA 504 program or another loan is a better fit.
Sources:What are the eligibility requirements for an SBA 7(a) loan?
The eligibility requirements for an SBA 7(a) loan include:
- The business must meet the SBA's size standards for its particular industry.
- The business must have fewer than 500 employees and less than $7.5 million in revenue each year for the previous three years.
- The business must physically be based in the U.S. and operate within the U.S. and its territories.
- The business must operate for profit.
- Business owners must first have used other sources of financing, including personal funds, in order to qualify.
- Businesses must not be involved in lending, real estate, or speculation.
- Your business must operate for profit. Nonprofits and not-for-profit businesses are not eligible.
- You must also have some equity in the business — this could mean you already have a profitable business, or you could use your own personal equity as collateral.
- If you have any alternative financial resources, you must have used them first. For example, if you have a personal savings account or are able to get a personal loan, then you must first pursue those options before applying for an SBA 7(a) loan.
- The business owner cannot be on parole.
- You must be doing business in the U.S. or its territories.
What are the advantages of an SBA 7(a) loan?
The advantages of an SBA 7(a) loan include:
- Highly competitive, low interest rates
- Long loan terms, up to 25 years
- Fixed and variable-rate options are available
- A variety of businesses are eligible
- Low down payments, typically around 10-20%
- Variety of loan options, including SBA 7(a) express loans, SBA 7(a) CAPLines
- Most SBA loans, including 7(a) loans are fully amortizing, meaning borrowers don’t have to worry about balloon payments
Flexibility in underwriting, often has lower interest rates than other comparable financing options, and flexible collateral requirements are also advantages of an SBA 7(a) loan.
What are the disadvantages of an SBA 7(a) loan?
SBA 7(a) loan disadvantages include:
- Lengthy approval times (for standard SBA 7(a) loans)
- Lots of documentation
- Collateral is often required
- Certain businesses, including real estate investing, lending, gambling, and speculation are prohibited
- High credit scores are typically required (typically 680+)
- May be restrictions on supplemental/additional financing
Source: www.sba7a.loans/sba-7a-loans-small-business-blog/pros-and-cons
Source: www.commercialrealestate.loans/blog/difference-between-sba-7a-and-sba-504-in-cre
How long does it take to get approved for an SBA 7(a) loan?
The length of time it takes to get approved for an SBA 7(a) loan depends on the type of loan processing used. Standard 7(a) loan processing takes between 7-10 business days, while Certified Lenders Program (CLP) processing takes only 3 business days.
Source: www.sba7a.loans/sba-7a-loans-small-business-blog/how-long-does-it-take-to-approve-an-sba-7a-loan
How Much Down Payment is Required for the SBA 7(a) Loan?
Though each lender has their own requirements, the down payment for an SBA loan is typically between 10-30% of the amount borrowed. If you're going to take out the maximum amount of $5 million for your SBA 7(a) loan, at minimum you would need a down payment of at least $500,000.
The amount of your down payment for the SBA 7(a) loan, like all loans, depends on your business's financial standing and your credit history. If your personal and business credit scores are solid and you can prove you'll have sufficient cash flow to make regular loan payments, your lender may require a lower down payment. If you're a startup, your business isn't profitable, or you're buying a business with a less-than-stellar track record, your lender will probably require a higher down payment.
Other SBA 7(a) Loan Terms and Rates
If you're wondering about rates and fees, SBA loan maturity or other key facts about SBA business loans, check out our cheat sheet below or view the full SBA 7(a) Fact Sheet as a PDF.