SBA 7(a) Loans

This is the cheapest form of business financing. Get an SBA 7(a) loan in as little as 1 week.

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Overview of SBA 7(a) Loans

SBA 7(a) loans are the lowest-rate, longest-term loans available to most small businesses. These loans have favorable terms because they are partially guaranteed by the U.S. Small Business Administration (SBA). SBA 7(a) loans can be used for working capital, starting a new business, buying an existing business, or other business purposes.

Get Started With An SBA 7(a) Loan

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Small Business Financing

How SBA 7(a) Loans Work

SBA 7(a) loans are an inexpensive financing option for small business owners. Since these loans are backed by the U.S. Small Business Administration, they have some of the lowest interest rates and longest repayment terms that a small business can qualify for.

You can borrow anywhere between $5K to $5 million with an SBA 7(a) loan. Typically, SBA loans require a lot of paperwork and have a lengthy application process, but we can get you an SBA loan in 1-2 weeks. Find out how!

The SBA sets maximum interest rates on 7(a) loans. They are currently between 6-9 %. This is the cheapest form of business financing for most small businesses. The best SBA lenders can get you funded in under 30 days.

The low interest rates, combined with the fact that SBA 7(a) loans typically have 7-10 year terms, means that you’ll enjoy low monthly payments. There are fees on SBA loans, including the SBA guarantee fee, packaging fees, and closing costs. These fees can either be paid up front or rolled into the loan. Even taking these fees into account, SBA loans represent a bargain for most borrowers.

Beyond low interest rates and monthly payments, there are other advantages to getting an SBA 7(a) loan. For example, most SBA loans don’t have to be fully collateralized. You also may not have to put any money down. Finally, most SBA loans don’t have prepayment penalties, which gives you the flexibility of paying the loan off early.

SBA loans are available for startups in limited circumstances, such as when the owner has years of management or industry experience and a sizable down payment. In most cases, however, SBA 7(a) loans are best suited for established, profitable businesses that are over 2 years old.

There is more than one kind of SBA loan. SBA 7(a) loans are general purpose working capital loans. SBA 504/CDC loans are used to purchase real estate and equipment. If you are unsure which type of loan to apply for, we can help you evaluate which is better for your business goals.

Will I Qualify for an SBA 7(a) Loan?

The minimum requirements to qualify for an SBA 7(a) loan are: a personal credit score above 680, and you should be running a profitable business for at least 2 years. Check your credit score here for free!

If that sounds like you, apply for up to $350k with SmartBiz. Prequalify in minutes and get fast-tracked for funding here.

Startups or those looking to buy a business may also qualify for an SBA loan, but only if the owner has strong credit, business management experience or relevant industry experience, and a down payment of at least 20 percent.

Regardless of what stage your business is in, you must have a good business plan when applying for an SBA loan. Click here to learn how you can write a great business plan in just a few hours.

Cost of SBA 7(a) Loans

The typical interest of an SBA 7(a) loan is between 6 % and 9 %. There are also guarantee fee, referral and packaging fee, and closing costs which are deducted from your loan proceeds at the time of funding.

The SBA sets maximum interest rates. Subject to that maximum, your rate will depend on your personal credit score, your business credit score, your time in business, and the profitability of your business.

7(a) Loan Details:


max-loan-amountMaximum Loan Amount
$5 Million


loan-termTypical Loan Term
Typically 10 Years


interest-ratesTypical Interest Rates
6-9 %


speedSpeed
As fast as 1 week



Down-PaymentDown Payment?
Typically not required.


CollateralCollateral
Yes, but the loan doesn’t have to be fully collateralized.


Personal-GuaranteePersonal Guarantee?
Yes.

Have a question?

Pros


small business loansOne of the cheapest forms of business financing

small business loans

Long loan terms and low monthly payments

small business loans

Down payment or collateral may not required

small business loansNo prepayment penalty in most cases

small business loansSuitable for wide of variety of business purposes

Cons


small business loansCan take longer to get funding than other types of loans

small business loans

Requires a lot of paperwork

small business loans

Hard to qualify

 

How to Apply

how-to-apply1Answer Simple Questions
thin-line
how-to-apply2Browse Your Loan Options
thin-line
how-to-apply3Get Funded in Record Time

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Additional Resources

SBA Loan Rates: Current Interest Rates & How They Work

SBA Loan Calculator

How Can a Startup Get An SBA Loan?

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