The 7(a) Loan Program is SBA’s primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. SBA itself does not make loans, but rather guarantees a portion of loans made and administered by commercial lending institutions. 7a loans are designed to help business with special requirements.
Types of 7a Loans
- Express Programs: SBA’s Express programs offer streamlined and expedited loan procedures for particular groups of borrowers. The express programs are made up of the SBA Express, the Patriot Express, and the Export Express Loan Programs (listed as part of the Export Loan Programs).
- Export Loan Programs: SBA has placed a priority on helping small business exporters—some 70 percent of all U.S. exporters have 20 or fewer employees—with a number of loan programs specifically designed to help them develop or expand their export activities. These loan programs include the Export Working Capital Loan, the Export Express Loan, and the International Trade Loan
- Advantage and Rural Loan Programs: The Small/Rural Lender Advantage (S/RLA) initiative is designed to accommodate the unique loan processing needs of small community/rural-based lenders by simplifying and streamlining loan application process and procedures. These include the Small Loan Advantage, Community Advantage loans, Rural Lender Advantage, and the B&I Guaranteed Loan.
- Special Purpose Loan Programs: Specialty purpose Loans are designed to assist those businesses affected by NAFTA, developing Employee Stock Ownership Plans, and implementing pollution control measures. The Specialty purpose loans include the CAIP loan for borrowing costs and the CAPlines for seasonal funding needs as well as Pollution Control and Employee Trusts Loans.
What Banks Are Looking For
To be considered for a 7(a) loan, applicants must meet certain eligibility requirements. These requirements are designed to be as broad as possible so the program can accommodate the most diverse variety of small business financing needs. First, your startup must operate as a for profit company and do business in the United States or its possessions. Your entrepreneurial venture must also meet SBA size standards and not have any funds available from other sources. You, the entrepreneur, must have what the SBA determines as “good character”, management expertise, and the ability to pay the loan on time. A strong business plan is typically required as well.
