25-YEAR FIXED RATE AS LOW AS 6.594%

20 YEAR INTEREST RATE AS LOW AS 6.707%

LOAN SIZE

Up to $5,000,000


ELIGIBLE USE OF PROCEEDS

The 7(a) Loan Program is design to provide start-up and existing small businesses, with financing assistance for a variety of general business purposes, such as:


HOW THE PROGRAM WORKS

SBA partially guarantees loans made to small businesses by participating lenders, such as banks. This guarantee reduces the risk to the lender, although borrower remains obligated for the full amount of the debt. The terms of the loan are negotiated between the applicant and the lender, although the interest rates are subject to SBA limits


ELIGIBLITY

To be eligible, businesses must meet the following requirements:


LOAN TERMS

The maximum maturities for 7(a) loans is:


INTEREST RATES

The interest rate for 7(a) loans is negotiated between the applicant and the lender, subject to SBA maximums. The interest rate is comprised of two parts: the “base rate” and an allowable “spread”. The base rate can be based on the Wall Street Journal Prime rate, the LIBOR one-month rate +3%, or the SBA Peg Rate. Lenders are allowed to add a spread to the base rate based on the following maximums:


PERCENTAGE OF LOAN GUARANTEES


LOAN FEES

SBA charges a guaranty fee on its loans. The fee is based on the loan’s maturity and the dollar amount guaranteed, not the loan amount. The guaranty fee is charged to the lender, but may be passed on to the borrower. The fee is calculated as follows:


OTHER LOAN PROGRAMS

Through the 7(a) program, SBA offers various special purpose loan programs which can provide financing for revolving lines of credit, exporting, and other purposes.

For more information on 7(a) loans please contact a Loan Officer