SBA 7(a) loans
The most flexible financing in the SBA program. Up to $5 million for buying a business, buying out a partner, purchasing the building you operate from, equipment, working capital, or refinancing debt you’re already carrying.
One loan, most purposes
Unlike the 504, which exists specifically for fixed assets, a 7(a) can cover several needs under a single note. That’s usually the reason to choose it.
- Buying a business. Full or partial change of ownership, including franchise acquisition.
- Partner buyouts. Funding the exit of one or more existing owners.
- Owner-occupied real estate. Purchase, or refinance of a mortgage you already hold.
- Construction and renovation. Ground-up or improvement of a property you’ll occupy.
- Equipment. New or used, with terms matched to useful life.
- Working capital. Inventory, payroll, seasonal swings, expansion costs.
- Debt refinance. Existing business debt on better terms, where the benefit is demonstrable.
How a 7(a) is built
| Maximum loan | $5,000,000 |
| SBA guarantee | 85% on loans up to $150,000, 75% above that — capped at $3.75 million |
| Real estate term | Up to 25 years, fully amortized, no balloon |
| Equipment term | Up to 10 years, or useful life |
| Working capital term | Up to 10 years |
| Rate structure | Base rate plus a lender spread, with the spread capped by the SBA according to loan size |
| Equity injection | 10% on startups and complete changes of ownership; no universal minimum otherwise |
| Prepayment | Declining penalty in the first three years on terms of 15 years or more |
Since March 1, 2026, lenders may price a variable-rate 7(a) off SOFR, the 5-year Treasury or the 10-year Treasury in addition to Prime and the SBA Optional Peg Rate. Whichever base is used, the total rate cannot exceed Prime plus the allowable spread for that loan size — the Prime-based ceiling still governs.
What actually counts as your down payment
This is where more acquisitions fall apart than anywhere else.
A 7(a) requires a 10% equity injection on a startup or a complete change of ownership. The question is which dollars qualify. Under SOP 50 10 8, a seller note counts toward that injection only if it’s on full standby for the entire term of the loan — no principal, no interest, for the life of the note. A two-year standby, which was acceptable under earlier guidance, no longer does the job.
If you’re negotiating a purchase and planning to lean on seller financing to cover your injection, the standby terms need to be settled in the LOI. Renegotiating them after the lender flags it costs you weeks and leverage.
Buying out a partner
A 2025 SOP update opened this up considerably. A 7(a) can now fund a partial change of ownership — one or more owners exiting while others stay — provided the business meets a 9:1 debt-to-worth ratio after the transaction, or the buyer contributes at least 10% equity.
The structural trap: if the departing partner retains any equity at all, they’re treated as a continuing owner and must personally guarantee the loan for two years. That usually defeats the point of the buyout. Structure it before you negotiate, not after.
Meanwhile the July 4, 2026 policy change decoupled the 7(a) and 504 caps, so eligible borrowers can now reach up to $10 million combined where the ceiling used to be $5 million.
None of that is visible from outside. A file that would have cleared easily in 2023 gets returned today, and a deal that didn’t pencil last year might now. Keeping current on it is the job.
FAQ
What's the maximum 7(a) loan?
$5 million. Since July 4, 2026, an eligible borrower can also combine a 7(a) with a 504 up to $10 million total, because an outstanding 7(a) balance no longer reduces the 504 debenture maximum.
Can I use a 7(a) to buy a business?
Are 7(a) loans personally guaranteed?
Is there a prepayment penalty?
What credit score do I need?
How long does it take?
What we've done
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Nationwide
Purchases, refinances, cash-out refinances, ground-up construction and bridge. Hotels and motels, flagged and independent. Gas stations with and without c-store. Car washes. Self storage. Daycare, retail, office and light industrial where the owner occupies the building.
Trusted by Business Owners Nationwide
They understood the deal, not just the loan.
We were looking for financing to purchase a gas station and had already spoken with a couple of lenders who couldn’t give us a clear path forward. SBA Finance Group took the time to understand the business, walked us through our options, and helped us structure the financing from beginning to end. Having someone who understood this type of transaction made a huge difference.
They made a complicated process much easier.
Financing a hotel purchase can get complicated quickly. The SBA Finance Group team was responsive, straightforward, and always kept us informed about what was needed next. They helped us work through the financing process and kept the transaction moving toward closing. I would absolutely work with them again.
We finally felt like someone was working with us.
What stood out was the level of communication. Instead of simply telling us whether a deal fit into a lending box, they helped us understand the different options available and what made the most sense for our business. We were able to secure financing for our acquisition and move forward with confidence.