If your project doesn't fit the requirements for conventional financing, and you meet the eligibility requirements, you can use a 7(a) loan to buy real estate, equipment, or inventory for your small business. It may also be used for working capital, to refinance business debt or purchase a small business.
MAX LOAN AMOUNT: $5 million
INTEREST RATE: Generally Wall Street Journal prime+ a reasonable rate capped at 2.75%
TERMS: Loan term varies according to the purpose of the loan, SBA allows up to 25 years for real estate, 10 years for other fixed assets and working capital.
GUARANTEE: 50 to 90%
Example of a 7(a) loan: The customer was the manager of an existing 50 year old business. The owners wanted to sell and the customer used a 7(a) loan to purchase the existing business.