The Small Business Administration offers guaranteed loan programs, one of which is called the SBA 7a (also commonly referred to as the SBA 7(a) loan). According to the SBA, the 7(a) Loan Program includes financial help for small businesses with special requirements.
What Can an SBA 7a Loan Be Used For?
An SBA 7(a) loan is the best option when real estate is part of a business purchase, but it can also be used to:
- Purchase working capital, both short-term and long-term,
- Refinance business debt
- Purchase furniture, fixtures, and supplies
What is the Maximum Loan Amount for an SBA 7(a) Loan?
The most you can get from an SBA 7(a) loan is $5 million.
How Difficult Are SBA 7a Loans to Get?
Every lender is different, but there are some common characteristics each bank looks for in a business. Among those are:
- What does the business do?
- What is its credit history?
- Where does the business operate?
The SBA 7a loan is the SBA's most popular loan program for business owners and many people who would not normally qualify for a traditional small business loan find that they do through the SBA 7(a) program.
While many people believe that the SBA 7(a) loan is exclusively for individuals who want to start a new business, it is also an ideal financing instrument for those who wish to expand an existing business, refinance higher-interest debt, buy a building, or finance a construction project.
What Documents Are Needed to Apply for an SBA 7a Loan?
Because an SBA 7a loan is a loan guaranteed by the Small Business Administration (and hence, part of the federal government), there are quite a few forms you need to fill out and documents you need to supply. Start here:
- SBA Form 1919 and submit it to an SBA-participating lender.
- SBA Form 912 (statement of personal history) and SBA Form 413 (personal financial statement).
- P&L – Current within 180 days of your application. Also include supplementary schedules from the last three fiscal years.
- Projected financial statements – Include a detailed, one-year projection of income and finances and explain how you expect to achieve this projection.
There are many more paperwork requirements. You can find a complete list here.
More About SBA Loan Programs & Small Business Loans
The SBA 7a is one of the two primary Small Business Administration's loan programs for businesses. The other is the SBA 504.
You may be asking, “What is the difference between an SBA 7a loan and an SBA 504 loan?” The answer is here.
Read the articles below to learn more about the Small Business Administration's SBA 7a loan programs
- SBA 7a Loan Program Video TutorialsWelcome to our comprehensive YouTube playlist on the SBA 7(a) loan program. This playlist is designed to provide small business owners with a thorough understanding of the program and how it can benefit their business. Watch the Playlist on YouTube The SBA 7(a) loan program is a government-backed loan program that offers small business owners […]
- Financing a Planet Fitness Franchise Using an SBA 7a LoanIn this article, you will learn what you need to know in order to purchase a Planet Fitness franchise using an SBA 7a loan. What you need to know about the Planet Fitness franchise:Liquid capital required$1,500,000Net worth required$3,000,000Investment$936,600 – $4,558,000Franchise fee$20,000Royalty7.0%Offers FinancingYesUnits in operation2,174Founded1992Franchising Since2003Two weeks of training are provided by Planet Fitness to its franchisees […]
- How to Get an SBA 7a Loan in PennsylvaniaIn this article, you will learn how to get an SBA 7a loan in Pennsylvania Pennsylvania is a great state to start or expand a business. One of the best lending programs for small businesses is the SBA 7a loan. It’s perfect for nearly all small businesses, especially those needing working capital. Continue reading to […]
- How Do I Get an SBA 7a Loan in California?You will gain knowledge about how to get an SBA 7a loan in California by reading this post. Investing in commercial or residential property, as well as beginning or expanding a business, are all highly recommended activities in the state of California. Through the SBA 7a loan program, you will have the opportunity to acquire […]
- Can You Finance RV Parks with SBA Financing?Short answer: Yes, you can finance RV parks with SBA financing, either in the form on an SBA 7a loan or an SBA 504 loan. Long answer: Yes, you can. You can even finance turnaround parks, meaning an RV park that is having some occupancy issues or is mismanaged, maybe the debt service coverage ratio (DSCR) is a little bit lower than the normal […]