SBA (7a) Loans
SBA Lending Definitions and parameters.
The 7(a) Loan Program, SBA’s primary business loan program, provides loan guaranties to lenders that allow them to provide financial help for small businesses with special requirements. 7(a) loans can be used for:
| Asset Financing | 12 or 24 months statements to qualify (must be in business at least 12-24 months) |
| Loan size | 90% Loan to value (LTV) financing (for primary residence only), 80% on refinance cash out |
| Long-Term, Fixed Rates | 620 |
| Lower Down Payment | Up to $4,000,000 |
| Owner-Occupancy | Small businesses must occupy at least 51% of an existing building or 60% if constructing a new facility. |
| Minimum Fico | Generally 680 and above (exceptions for lower scores) |
| No major adverse credit history | Ex BK, FC, tax liens |
| Borrower profile requirements | Must have owner equity to invest, be willing to provide a personal guarantee (if own > than 20%), have a tangible net worth of less than $20 million, and have an average net income of less than $6.5 million (after for the two years preceding). |
Ineligible Business types: Not for profit, Financial businesses, non owner occupied businesses, passive companies, Life insurances, business located outside USA, gambling, private clubs, pornography, political lobbying, speculative businesses.