SBA 7(a) Loans
The SBA 7(a) loan program is the gold standard of small business lending. Government-backed loans up to $5 million with the lowest rates available, longest repayment terms, and favorable qualification criteria. The application process is longer but the terms are unmatched.
What You Need to Know
SBA 7(a) loans are the gold standard of small business financing, offering the lowest interest rates and longest repayment terms available anywhere. The program is backed by the U.S. Small Business Administration, which guarantees up to 85% of loans under $150,000 and 75% of loans above that, significantly reducing lender risk and resulting in better terms for borrowers. Loan amounts range from $30,000 to $5,000,000, with interest rates typically between Prime + 2.25% and Prime + 4.75% depending on loan size and term. Repayment terms extend up to 10 years for working capital, 10 years for equipment, and 25 years for real estate, far longer than any alternative lender offers. To qualify, you'll generally need a credit score of 680+, at least 2 years in business, and annual revenue sufficient to cover debt service (typically $100K+). The application process is more involved than online lenders, expect to provide tax returns, financial statements, business plans, and collateral documentation. Approval typically takes 30-90 days depending on the lender, though SBA Preferred Lenders can expedite this to 2-3 weeks. Despite the longer timeline, the savings are substantial: an SBA loan at 8-10% APR over 10 years costs a fraction of what an MCA at 1.3x factor rate costs over 12 months.