SBA’s main, most flexible loan program

SBA 7(a) Loan

An SBA 7(a) loan is a business loan of up to $5 million made by a bank or other lender, with SBA guaranteeing 85% of loans up to $150,000 and 75% of larger loans. It can pay for working capital, equipment, a business purchase or owner-occupied real estate.

Updated October 2026 for SOP 50 10 8.1, effective October 1, 2026.

Maximum: Up to $5 million
Terms: Generally up to 10 years; up to 25 years for real estate
Rates: Negotiated with the lender, capped by SBA at the base rate (usually Prime) plus 3% to 6.5%, depending on loan size. Smaller loans have higher caps.
SBA guarantee: 85% for loans up to $150,000; 75% above $150,000
Collateral: None required for loans up to $50,000. Above that, lenders take a first lien on the assets financed and, if that does not fully secure the loan, available equity in the personal real estate of 20% owners. A loan is not declined for lack of collateral alone.
How to apply: Through an SBA-participating bank or lender. SBA’s Lender Match tool can connect you with one.

Checked against sba.gov, October 2026. Lenders set their own terms within SBA limits.

Good for

Working capital
Equipment and inventory
Buying a business or a partner’s share
Buying or improving owner-occupied real estate
Refinancing business debt

Not for

Passive real estate investment
Businesses on SBA’s ineligible list
Businesses that can get the same credit on reasonable terms without SBA

Who qualifies

An operating, for-profit business located in the United States
Small under SBA size standards for your industry
Not an ineligible business type (for example lending, passive real estate, gambling)
Every owner and required guarantor a U.S. citizen or U.S. national living in the U.S. (SOP 50 10 8.1)
No delinquent federal debt, such as a past-due SBA or student loan
Unable to get the same credit on reasonable terms without SBA help
Able to show the business can repay the loan
Personal guarantee from every owner of 20% or more
At least 10% cash injection for startups and business purchases
Debt service coverage: cash flow covering the new payment with a cushion

What to prepare

Two to three years of business and personal tax returns
Year-end and year-to-date financial statements
SBA Form 1919 and SBA Form 413 for each 20% owner
A business debt schedule
A business plan with projections for young businesses, purchases and expansions
A clear use of funds with quotes, contracts or invoices

Your lender may ask for more. The Lender Document Checklist covers every program in detail.

SBA 7(a) Loan: common questions

What is the maximum SBA 7(a) loan amount?

$5 million. 7(a) Small loans go up to $350,000 and SBA Express loans up to $500,000 (SOP 50 10 8.1, Section B).

Is an SBA 7(a) loan personally guaranteed?

Yes. Every person or entity owning 20% or more of the business gives an unlimited full guaranty. If no one owns 20% or more, at least one owner must guarantee the loan (SOP 50 10 8.1).

What credit score do you need for an SBA 7(a) loan?

SBA sets no minimum credit score. Lenders review the owners’ and guarantors’ credit reports and apply the credit policies they use for similar non-SBA loans; if they use a scoring model, the score and approval range go in the credit memo (SOP 50 10 8.1, Section B, Ch. 1).

How much down payment does a 7(a) loan need?

Start-ups (operating one year or less) and business purchases need an equity injection of at least 10% of total project costs. For other existing businesses, SBA sets no fixed minimum and the lender decides (SOP 50 10 8.1, Section B, Ch. 1).

Can I buy a business with an SBA 7(a) loan?

Yes. The buyer injects at least 10% of the project cost, and the business’s historical cash flow must cover all debt payments at least 1.25 times (1.15 for a business expansion). A seller note on full standby can supply up to half of the injection (SOP 50 10 8.1, Appendix 15).

Can an SBA 7(a) loan buy commercial real estate?

Yes, if the business occupies at least 51% of an existing building (60% for new construction). Real estate terms run up to 25 years (SOP 50 10 8.1, Appendix 17).

Are SBA 7(a) rates fixed or variable?

Either. Variable rates are capped at Prime plus 3% to 6.5% depending on loan size; fixed rates are capped at a maximum SBA publishes each month (SOP 50 10 8.1, Appendix 18).