Glossary
What is SBA 7(a) Loan?
The SBA 7(a) loan is the Small Business Administration's primary and most flexible loan program. Loans are made by approved lenders and partially guaranteed by the SBA, with a maximum loan amount of $5 million. Eligible uses include working capital, equipment, business acquisitions, refinancing certain debt and real estate. Terms are often longer than conventional business loans. Owners of 20% or more generally must provide a personal guarantee, and lenders set their own credit requirements.
Example
A buyer uses a 7(a) loan to purchase an existing landscaping company, including its equipment and customer contracts.
Related funding
SBA Loans: Government-backed loans with long terms for growth, real estate and acquisitions.
Related terms
Questions about an offer? Your advisor will explain every term.