Glossary · The loan itself
7(a) loan
In short
The SBA's main loan program. A bank lends you the money and the SBA guarantees most of it, which lets banks fund business purchases they otherwise wouldn't.
What it means in a deal
When you buy a business with an SBA 7(a) loan, the bank writes the check but the government backstops most of the risk — which is why lenders will fund deals at 10% down that they'd never touch on a conventional basis. The program tops out at $5 million, covers businesses across almost every industry, and is the default financing tool for acquisitions under that ceiling. Your goal is to find a Preferred Lending Partner (PLP) who has done deals in your industry and deal-size range, because their approval turnaround is days, not months.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about 7(a) loan
- Are SBA 7(a) loans only for businesses unable to get traditional bank loans?
- What exactly is an SBA 7(a) loan, and who offers these loans?
- How do SBA 7(a) loan interest rates compare to standard commercial loans?
- What makes an SBA 7(a) loan 'government-backed' compared to other loans?
- Are franchises eligible for SBA 7(a) loans?
- Are SBA 7(a) loan interest rates typically higher or lower than conventional bank loans?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-16 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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