SBA 7(a) terms, conditions, and eligibility

Loan amounts

The 7(a) program covers loans up to $5 million. Most business acquisitions fall between $500K and $3M. Loans of $500K or less qualify for the 7(a) Small Loan program, which has a simplified documentation path.

There is no minimum loan size, but most SBA lenders set their own floors — typically $150K–$350K — because the underwriting cost doesn't scale well below that.

For the full rate and fee picture, see rates & fees in depth →

Loan maturities

Maturity depends on the primary use of proceeds:

• Business acquisition (no real estate)Up to 10 years
• Working capital or inventoryUp to 10 years
• Machinery or equipmentUp to 10 years (or useful life, whichever is less)
• Real estate (if ≥51% of proceeds)Up to 25 years
• Mixed-use (business + real estate)Blended maturity — typically negotiated

No prepayment penalty applies on 7(a) loans with a maturity of 15 years or less — so most acquisition loans can be paid off early without a fee.

Guaranty percentages

The SBA guarantees a portion of each 7(a) loan, which is what lets lenders finance deals they couldn't fund conventionally. The guaranty percentage depends on loan size:

• Loans up to $150,000Up to 85% SBA guaranty
• Loans over $150,000Up to 75% SBA guaranty

The guaranty runs to the lender, not the borrower — it means the lender recovers up to 75–85% of the outstanding balance if the loan defaults. The borrower still owes the full amount and is personally liable under the personal guaranty.

Interest rate caps

SBA 7(a) interest rates are variable (typically WSJ Prime + a spread) or fixed. The SBA caps the spread over Prime by loan size. With Prime currently at 6.75%, most acquisition loans price between roughly 9% and 10.5%.

For today's exact rate, visit today's 7(a) rate →. For the full fee and rate schedule, see rates & fees in depth →.

Basic borrower eligibility

To qualify for a 7(a) loan the business and the people behind it must meet a set of SBA requirements. The hard lines are:

• ✓The business must be for-profit and located in the United States.
• ✓It must meet SBA size standards (generally: net worth under $20M and average net income under $6.5M for the last two years).
• ✓At least 95% of ownership must be U.S. citizens, U.S. nationals, or Lawful Permanent Residents with a U.S. principal address.
• ✓The borrower must show it cannot get credit on reasonable terms without SBA assistance (the credit-elsewhere test).
• ✓The borrower must not be debarred, suspended, or have a prior SBA loss on record without repayment.
• ✓Certain industries are ineligible: gambling, passive real estate investment, speculative investments, certain financial institutions.

For a deeper eligibility walkthrough, see who qualifies for a 7(a) →.

CapBench tools that use these rules

About this source

The SBA's 7(a) terms and conditions page is a summary reference, not a regulation. It reflects the program rules at the time CapBench last checked it (2026-06-13). The binding authorities are 13 CFR Part 120 and SOP 50 10. See the full source guide for this page →