7(a) Loan Programs Guaranteed by the Small Business Administration
Frequently Asked Questions
Q: What is a “7(a)” loan?
A: The 7(a) loans is the most popular, most basic of the Small Business Administration’s (SBA) guaranteed lending programs.
Q: Why should I consider a 7(a) loan for my project?
A: A 7(a) guarantee from the SBA makes lenders more willing to lend money to small businesses with weaknesses in their loan applications such as a lack of cash flow history.
Q: What is the maximum size of a 7(a) loan?
A: Up to $5 million.
Q: What is the payback term on a 7(a) loan?
A: Up to 25 years on real estate, up to 10 years on equipment and working capital.
Q: What kind of interest rates are charged on 7(a) loans?
A: The rate on your 7(a) loan will be based upon the current Prime Rate, the size of your loan, and the maturity date.
Q: Are there qualifications for my business to be eligible for a 7(a) loan?
A: Yes, there are certain qualifications that must be met in order to be eligible for a 7(a) loan?
- You must be certified by the SBA as a small business.
- You must have personal assets you’re investing in the business.
- You must show that the loan is for a sound business purpose.
- You must have never defaulted on any debt to the U.S. government.
Q: Are there types of businesses that don’t qualify for 7(a) loans?
A: Yes, there are businesses that do not qualify for 7(a) loans:
- You cannot use these loans for speculative real estate loans.
- You cannot be a lending company.
- Non-profit businesses do not qualify.
Q: Are there specific ways that 7(a) loan funds must be used?
A: Yes, SBA loans must be used for approved purposes such as:
- Purchase of land or buildings.
- The purchase of equipment, machinery, or supplies.
- Long or short-term working capital.
- To re-finance or purchase an existing business.
Stone Bank is an SBA-approved lender. All loans are subject to credit approval, verification, SBA eligibility requirements, and Stone Bank internal credit approval. Terms and conditions are subject to change without notice. Stone Bank is a financial institution and is not an agency of the U.S. Small Business Administration (SBA). SBA participation does not constitute an endorsement of the views, opinions, products, or services of any lender. Loan terms, interest rates, and program availability are subject to borrower qualifications and SBA guidelines. Previous results do not guarantee future outcomes. SBA loan approval is not guaranteed. Marketing material does not guarantee funding. The information provided on this website is for general informational purposes only. It does not constitute financial or legal advice and may not reflect current legal or program developments.