The SBA’s primary loan program.
Maximum amount guaranteed is $750,000 in most cases.
Percent of Guarantee
Interest Rates
Use of Proceeds
Maturity
Guaranty Fees
Eligibility
75% maximum guarantee if more than $100,000
80% maximum guarantee if loan is $100,000 or less.
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Interest rates can be negotiated between the borrower and lender, may be fixed or variable, are tied to the prime rate (as published in the Wall Street Journal), and may not exceed the following SBA maximums:
2.25 percent over prime for loans of less than seven years, and
2.75 percent over prime for loans of seven years or longer
Loans
under $50,000 may have a slightly higher rate.
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1. expansion or renovation
2. construction of new facility
3. working capital
4. purchase land or buildings
5. refinance debt for compelling reasons
6. purchase equipment, fixtures, leasehold improvements
7. seasonal line of credit
8. inventory
Depends on ability to repay; the following are general years:
working capital is 5-10 years
machinery/equipment,
real estate, construction up to 25 years (not to exceed life of equipment)
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Paid by lender (may be passed on). Based on maturity and amount of SBA exposure.
.25 % for 1 year or less
2% for over 1 year, SBA share is $80,000 or less
Figured
on incremental scale if over 1 year, SBA share more than $80,000
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A business is eligible for the SBA 7(a) Loan program if:
The business is operated for a profit;
The business meets SBA size standards
Business and owners show good character, management expertise and commitment and ability to repay
Business
is not involved in speculation or investment in rental real estate.
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More SBA loan information can be found at www.sba.gov