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Exploring the SBA 7(a) Loan Program: A Comprehensive Guide to Types, Terms, and Eligibility

This article delves into the SBA 7(a) Loan Program, providing a comprehensive guide on its various types, terms, and eligibility criteria.

The 7(a) loan program is the Small Business Administration's (SBA) primary scheme for providing financial assistance to small businesses. This program offers several types of loans, each with unique features and requirements, catering to different business needs. Here's a summary of the various types of 7(a) loans:

1. Standard 7(a) Loans: 

   - For loans over $500,000, excluding specific subtypes.

   - Loan Amount: $500,001 to $5 million.

   - Maximum SBA Guarantee: 75%.

   - Interest Rate: Negotiable, capped by SBA maximum.

   - Revolving Lines of Credit: Only under specific conditions.

   - SBA Turnaround: 5-10 business days.

   - Collateral: Required up to the loan amount.

   - Credit Decision: By SBA or delegated lenders.

2. 7(a) Small Loans:

   - For loans up to $500,000.

   - Maximum SBA Guarantee: 85% for loans up to $150,000; 75% for higher amounts.

   - Interest Rate: Negotiable within SBA limits.

   - SBA Turnaround: 2-10 business days.

   - Collateral: Varies based on loan amount.

   - Credit Decision: By SBA or delegated lenders.

3. SBA Express:

   - Max loan amount of $500,000.

   - Maximum SBA Guarantee: 50%.

   - Interest Rate: Negotiable, capped by SBA.

   - Revolving Lines of Credit: Up to 10 years.

   - Collateral: Not required for loans up to $50,000.

   - Credit Decision: Made by the lender.

4. Export Express:

   - Designed for businesses developing their export operations.

   - Maximum loan amount: $500,000.

   - Maximum SBA Guarantee: 90% for loans ≤ $350,000; 75% for larger loans.

   - Interest Rate: Negotiable within SBA limits.

   - Revolving Lines of Credit: Max 7 years.

   - Credit Decision: Made by the lender.

5. Export Working Capital:

   - Supports export sales.

   - Maximum Loan Amount: $5 million.

   - Maximum SBA Guarantee: 90%.

   - Interest Rate: Negotiable without SBA cap.

   - Revolving Lines of Credit: Terms ≤ 36 months.

   - Collateral: Export-related inventory and foreign receivables.

6. International Trade:

   - For improving competitive position of exporters or businesses affected by imports.

   - Maximum Loan Amount: $5 million.

   - Maximum SBA Guarantee: 90%.

   - Interest Rate: Negotiable, capped by SBA.

   - SBA Turnaround: 5-10 business days.

7. CAPLines:

   - For short-term and cyclical working-capital needs.

   - Includes various types like Seasonal, Contract, Builders, and Working CAPLines.

   - Maximum Maturity: 10 years (except Builders CAPLine).

Each loan type within the 7(a) program has specific conditions regarding loan amounts, interest rates, SBA guarantees, collateral requirements, and turnaround times. Lenders can be granted delegated authority to process, close, service, and liquidate certain 7(a) loans without prior SBA review, which streamlines the lending process. This range of loan types ensures that diverse business needs can be met, from export development to working capital and large-scale investments.