SBA 7A
ADVANTAGES
Long-term financing available to those unable to obtain full financing from conventional sources.
USE OF FUNDS
Land. Building construction. Renovation. Machinery. Inventory. Working
capital.
SOURCE OF FUNDS
Bank guaranty and direct loans from SBA.
INTEREST RATES
 | Bank guaranty loan: Lender sets rate, may be fixed or variable, up to
2.75% above New York prime if seven-year term or more; 2.25% above New York
prime if under seven years |
| Direct loan: Fixed rate; based on federal government's rate and subject to
change quarterly. Direct loans restricted to businesses located in high
unemployment areas or to Vietnam-era and disabled veterans |
MATURITY TERM
| Purchase of machinery and equipment, furniture and fixtures up to 10
years. |
| Purchase of land, buildings and/or construction up to 25 years. |
| Working capital: five to seven years. · Purchase of inventory or supplies:
five to seven years. |
| Combination loans: five to seven years. |
LIMITS
Bank guaranty loan: 80% guarantee to bank on loans not over $100,000. 75%
guarantee, up to a maximum of $1,500,000 on loans over $100,000. Guaranty fee of
2% can be charged to borrower.
ELIGIBILITY (This list is not comprehensive)
Must meet SBA small-business size standards. For business loans, size
standard eligibility based on average number of employees for preceding 12
months or on sales volume averaged over three-year period.
| Manufacturing companies: maximum number of employees may range from 500 to
1,500, depending on type of product manufactured. |
| Wholesale companies: maximum number of employees may not exceed 100.
|
| Services: annual receipts may not exceed $3.5 million to $21.5 million,
depending on industry. |
| Retailing: annual receipts may not exceed $5 million to $21 million,
depending on the industry. |
| Construction: general construction annual receipts may not exceed $9.5
million to $17 million, depending on the industry. |
For more complete information,
click here to go to the SBA 7a web page.
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