An SBA 7(a) loan is a business loan from a bank or other lender that the U.S. Small Business Administration partly guarantees, for up to $5 million, repaid monthly over up to 10 years for working capital and most equipment and up to 25 years for real estate. The rate is negotiated up to an SBA maximum, most loans carry an upfront guaranty fee of 2% to 3.75% of the guaranteed share, and the business has to be an operating, for-profit U.S. small business that can repay from cash flow. The loan takes weeks to close.
The figures below come from the SBA's lending rulebook, SOP 50 10 8.1, which took effect on October 1, 2026, and from the SBA's fee notice for 7(a) loans approved from October 1, 2026 through September 30, 2027. Through our lending partner, Today Capital Group helps owners get SBA 7(a) loans, including SBA Express, and conventional bank loans.
How an SBA 7(a) loan works
You apply to a lender, and the lender makes the loan from its own funds. The SBA guarantees part of it, so if the loan goes bad the agency covers that share of the lender's loss. The lender has to show why it would not make the loan on reasonable terms without the guarantee, for example because the business needs a longer term than its policy allows.
The guarantee covers up to 85% of a loan of $150,000 or less and up to 75% of a larger one, or 50% on SBA Express, and the SBA's share of all loans to one business is capped at $3.75 million. Most 7(a) term loans are repaid monthly, principal and interest. A fixed-rate payment stays the same, and on a variable rate the lender may change the payment when the rate changes.
What an SBA 7(a) loan can pay for
The uses on the SBA's 7(a) loan page are buying, refinancing or improving real estate and buildings, short- and long-term working capital, refinancing business debt, buying and installing machinery and equipment (AI-related expenses included), furniture, fixtures and supplies, and buying all or part of a business.
Buying a business has its own rules. The buyer puts in at least 10% of the total project cost, a seller note on full standby can supply no more than half of that, cash flow has to cover the loan payments at least 1.25 times, and the loan is repaid over no more than 10 years. Our guide to business acquisition loans covers the rest.
A 7(a) loan cannot pay off an active merchant cash advance. Under the SOP, an advance can be refinanced only after it has been converted to a term loan and paid down for at least 24 months. A conventional bank loan through our lending partner, without the SBA guarantee, can pay off an active advance when the file supports it, as our guide to using an SBA loan to pay off an MCA explains. We don't place 504 loans, the SBA's other route for buildings and long-life machinery, and our guide to SBA 504 loans explains them.
SBA 7(a) loan amounts and terms
A standard 7(a) loan goes up to $5 million. The SOP sets the longest term by what the money pays for and asks for the shortest term that suits the use and the business's ability to repay.
| What the loan pays for | Longest term |
|---|---|
| Working capital, inventory and goodwill | 10 years |
| Equipment, fixtures and furniture | Generally 10 years, or up to 15 when the asset's IRS useful life supports it |
| Leasehold improvements | 10 years, plus up to 12 months to finish the work |
| Real estate | 25 years, plus the time needed for any construction or renovation |
| Buying a business | 10 years for the business itself |
| A mix of uses | A blended term, or up to 25 years when 51% or more goes to real estate |
According to the SBA's page on types of 7(a) loans, a loan of 15 years or longer carries a prepayment fee if you pay off 25% or more early in the first three years, at 5%, 3% and 1% of the amount prepaid in years one, two and three. A 10-year loan carries no SBA prepayment fee.
SBA 7(a) loan rates and fees
You and the lender negotiate the rate, fixed or variable, up to the SBA's maximum. A variable rate is capped at prime plus a spread that shrinks as the loan grows, from 6.5% on loans of $50,000 or less to 3% above $350,000, and the SBA posts fixed maximums each month in its rate tables. For November 2026, with prime at 7%, a $350,000 loan could carry no more than 11.5% variable or 12% fixed. Our guide to business loan interest rates lists the maximum for every loan size.
Most 7(a) loans also carry an upfront guaranty fee on the guaranteed share. For loans approved from October 1, 2026 through September 30, 2027 with terms over 12 months, it is 2% of the guaranteed share on loans of $150,000 or less and 3% on loans of $150,001 to $700,000. Above $700,000 it is 3.5% of the guaranteed share up to $1 million plus 3.75% above that. The lender pays the fee to the SBA and may pass it on to you, and the SOP lets you pay it from the loan proceeds.
Loans of $700,000 or less to manufacturers, to businesses in listed food supply chain industries and to businesses in a rural area pay no upfront fee, and neither do SBA Express loans to businesses owned and controlled by a veteran or a veteran's spouse. The lender also pays the SBA an annual fee of 0.55% of the guaranteed balance, which it cannot pass on to you.
Collateral and personal guarantees
The SBA requires no collateral on 7(a) Small and SBA Express loans of $50,000 or less. On a larger 7(a) Small loan, the lender takes a first lien on what the loan buys, plus liens on the business's fixed assets when half or more of the money is working capital. A standard 7(a) loan is secured with the business's fixed assets, and if they fall short, with available equity in the owners' personal real estate. A lender may not decline a loan only because collateral is thin, and anyone owning 20% or more guarantees the loan in full.
Who qualifies for an SBA 7(a) loan
The business has to be operating, for profit, in the U.S., small under the SBA's size standards, not an ineligible type, unable to get the credit on reasonable terms elsewhere, and creditworthy, with repayment judged on cash flow. The lender divides operating cash flow, which the SOP defines as earnings before interest, taxes, depreciation and amortization, by a year of payments on all business debt, the new loan included. A standard 7(a) loan needs at least 1.15, a 7(a) Small loan needs 1.10 unless it buys a business, and a business purchase needs 1.25. If cash flow cannot carry the loan, the lender has to decline it whatever the collateral. Our guide to SBA loan requirements covers each test, the down payment and collateral in full.
Documents for an SBA 7(a) loan application
A standard 7(a) file is built on three years of tax returns or financial statements plus an interim statement. The lender also asks for a debt schedule, SBA Form 1919, a personal financial statement from each guarantor dated within 90 days of approval, and IRS Form 4506-C or 8821 so it can check your returns against IRS transcripts. On a 7(a) Small loan, the lender reads the last two months of statements on your main business account to confirm every debt is counted.
Types of SBA 7(a) loans
Through our lending partner we help with standard and Small 7(a) loans and SBA Express. CAPLines and the export programs appear below as general information.
| Type | Loan amount | Largest SBA guarantee | What it is for |
|---|---|---|---|
| Standard 7(a) | $350,001 to $5,000,000 | 75% | Any eligible use |
| 7(a) Small | Up to $350,000 | 85% up to $150,000, 75% above | Term loans, underwritten with the lender's own procedures |
| SBA Express | Up to $500,000 | 50% | Term loans and revolving lines of up to 10 years, decided by the lender |
| CAPLines (general information) | Up to $5,000,000 | 85% up to $150,000, 75% above | Seasonal, contract, builder and asset-based working capital |
| Export Express (general information) | Up to $500,000 | 90% up to $350,000, 75% above | Export sales, with lines of credit of up to 7 years |
| Export Working Capital (general information) | Up to $5,000,000 | 90% | Working capital for export sales, for up to 36 months |
Example: a $350,000 SBA 7(a) loan for equipment and working capital
This is an example, not a quote or any lender's terms. A business borrows $350,000 over 10 years, $200,000 for equipment and $150,000 for working capital, at an example fixed rate of 10%. At $350,000 it is a 7(a) Small loan, and 10 years is within the limit for both uses.
| Example figure | Amount |
|---|---|
| Loan | $350,000 ($200,000 for equipment, $150,000 for working capital) |
| Term and rate | 120 monthly payments at an example 10% fixed |
| Monthly payment | $4,625.28 |
| Payments a year | $55,503 |
| Total interest over 10 years | $205,033 |
| SBA guarantee | 75%, or $262,500 |
| Upfront guaranty fee | 3% of $262,500, or $7,875 |
| Interest plus the fee | $212,908 |
The upfront fee would be $0 if the business were a manufacturer, in a listed food supply chain industry or in a rural area. Because working capital is under half the loan, the SBA's collateral rule asks for a first lien on the $200,000 of equipment, and the lender's own policy may ask for more.
The lender then checks debt service coverage. Say the business has $95,000 a year of operating cash flow and pays $15,000 a year on existing debt. Coverage is $95,000 divided by $70,503 ($15,000 plus $55,503), or about 1.35, which clears the 1.10 a 7(a) Small loan needs. To reach 1.10 with these payments, the business would need about $77,550 of operating cash flow, so at $70,000 this loan would not pass as structured.
How long an SBA 7(a) loan takes
SBA and bank loans take weeks. The owner gathers the tax returns, statements and forms, the lender underwrites the file, and closing adds the loan documents and any lien filings. When a lender sends a loan to the SBA for review, the SBA lists its turnaround as 5 to 10 business days for a standard 7(a) loan and 2 to 10 for a 7(a) Small loan. Our guide to how long it takes to get a business loan walks through each stage.
Who an SBA 7(a) loan suits and who it does not
A 7(a) loan suits an established business whose tax returns show cash flow well above the new payment, with a use that earns its keep over years, such as equipment, a buildout or a purchase, and time to wait several weeks. It suits less well when the money is needed within days, when the returns don't show the cash flow yet, or when the goal is to pay off an active advance.
For an urgent need, revenue-based financing, which is a merchant cash advance, moves in days. You receive payment now for part of your future sales, sized on your usual revenue, and a set daily or weekly payment runs until the agreed total is paid. Advances run from $5,000 to $2,000,000, are typically funded within one to two business days of choosing an offer, and are decided mainly on four months of business bank statements. They are priced in factor rate and dollars, so $50,000 at a factor rate of 1.32 means $66,000 paid back, a cost of $16,000, which is the price of speed and of approval based on revenue.
A line of credit of up to $2,000,000, with offers in one to two business days, lets you draw and repay weekly or monthly on what you've drawn. For a machine or vehicle, equipment financing of up to $500,000 uses the equipment as its collateral, with offers typically in one to two business days. A 7(a) lender will count any such payment in its coverage test if you apply later. The funders we work with generally look for about a year in business and about $20,000 a month in deposits. If you're not there yet, apply anyway. Some funders work with newer or smaller businesses, and we'll tell you what's realistic.
How to start an SBA 7(a) loan with us
Today Capital Group is a business funding marketplace and not a lender. For an SBA 7(a) loan, including SBA Express, or a conventional bank loan, we take your file to our lending partner, which makes the loan and sets the terms, within SBA limits on a 7(a) loan. We are not the SBA or a government agency. We tell you which documents you need and keep the file moving, and our page on SBA and bank loans lays out each step.
Start with the short application and four months of business bank statements, uploaded as PDFs or emailed to us, and have three years of business tax returns, an interim profit and loss statement and a debt schedule ready. If a faster product fits better, one application goes to the funders in our network and the offers come back side by side. There is nothing to pay to apply or to see offers. To talk it through first, call (818) 351-0225.
Frequently asked questions
What is an SBA 7(a) loan?
An SBA 7(a) loan is a loan from a bank or other lender that the U.S. Small Business Administration partly guarantees, for up to $5 million, repaid monthly over up to 10 years, or up to 25 years for real estate.
Is an SBA 7 loan the same as an SBA 7(a) loan?
Yes, an SBA 7 loan and an SBA 7(a) loan are the same program, which takes its name from section 7(a) of the Small Business Act.
How much can you borrow with an SBA 7(a) loan?
A standard 7(a) loan goes up to $5 million and an SBA Express loan up to $500,000, and the lender sizes the loan so that cash flow covers all debt payments at least 1.10 to 1.25 times, depending on the loan.
How do I find SBA 7(a) loan lenders?
The SBA's Lender Match tool sends a list of interested SBA 7(a) loan lenders two business days after a request, and we help owners apply through our lending partner.
How long does it take to get an SBA 7(a) loan?
An SBA 7(a) loan takes weeks, because the lender underwrites tax returns, financial statements and a debt schedule, and an SBA review, when there is one, adds 2 to 10 business days.
Can an SBA 7(a) loan pay off a merchant cash advance?
An SBA 7(a) loan cannot pay off an active merchant cash advance, because the SOP allows an advance to be refinanced only after it has been converted to a term loan and paid down for at least 24 months, while a conventional bank loan without the SBA guarantee can pay one off when the file supports it.
