SBA 7(A) Loans

SBA provides loans to businesses; so the requirements of eligibility are based on specific aspects of the business and its principals. If you are awarded a 7(a) loan, the loan proceeds may be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business. All programs and rates are subject to change at any time.

Lending Criteria 7(A) Program
Maximum Loan Amount $5 million
Percent of Guaranty 85% guaranty for loans of $150,000 or less; 75% guaranty for loans greater than $150,000 (up to $3.75 million maximum guaranty)
Use of Proceeds Term Loan. Expansion/ renovation; new construction, purchase land or buildings; purchase equipment, fixtures, lease-hold improvements; working capital; refinance debt for compelling reasons; seasonal line of credit, inventory or starting a business
Maturity Depends on ability to repay. Generally, working capital & machinery & equipment (not to exceed life of equipment) is 5-10 years; real estate is 25 years.
Maximum Interest Rates

Loans less than 7 years:

  • $0 – $25,000 Prime + 4.25%
  • $25,001 – $50,000 P + 3.25%
  • Over $50,000 Prime + 2.25%

Loans 7 years or longer:

  • 0 – $25,000 Prime + 4.75%
  • $25,001 – $50,000 P + 3.75%
  • Over $50,000 Prime + 2.75%
Guaranty Fees (No SBA fees on loans of $150,000 or less approved in FY 2016.) Fee charged on guarantied portion of loan only. $150,001-$700,000 = 3.0%; $700,000- $1,000,000 = 3.5%; plus 3.75% on guaranty portion over $1 million, less than 12 months .25% Ongoing fee of 0.473% on loans over $150,000.
Who Qualifies Must be a for-profit business & meet SBA size standard; show good character, credit, management, and ability to repay. Must be an eligible type of business. Prepayment penalty for loans with maturities of 15 years or more if prepaid during first 3 years. (5% year 1, 3% year 2 and 1% year 3)
Benefits to Borrowers Long-term financing; Improved cash flow; Fixed maturity; No balloons; No prepayment penalty (under 15 years)
Closing Time Frame 30 – 45 Days
Broker Origination 1 point + $1,495 Processing fee – subject to minimum loan amount.
This information is NOT a loan approval or commitment to lend. The actual loan amount, interest rate, fees, costs and monthly payment on your specific loan transaction can vary and will depend on your choice of loan product and your unique credit profile. Loans (in CA) will be made pursuant to BRE License #02001852. Loan Brook, Inc. is an equal opportunity lender.