SBA 7(a) Loan Program (Standard 7(a))SBA 7(a) Loan Program (Standard 7(a))

Loan size (Standard 7(a))

More than $350,000 up to $5,000,000 per loan

legacy.sba.gov

Maximum SBA guaranty percentage

75% for loans over $150,000 (85% for loans of $150,000 or less)

ecfr.gov

Maximum SBA guaranty outstanding to one borrower and affiliates

$3,750,000 across all SBA loans

ecfr.gov

Maximum maturity

10 years for working capital, inventory and intangibles (including goodwill); equipment generally 10 years, up to 15 if IRS useful life supports it; real estate 25 years plus a reasonable construction period

legacy.sba.gov

Change of ownership maturity

Amortization may not exceed 10 years, except the real estate portion may run up to 25 years (blended), and special purpose property transactions may qualify for up to 25 years

legacy.sba.gov

Maximum variable rate (loans over $350,000)

Prime or SBA Optional Peg Rate + 3.0%; SOFR or 5-year/10-year Treasury may be used as an alternative base rate but the rate is capped at Prime + 3.0%

legacy.sba.gov

Maximum fixed rate (loans over $250,000)

Prime rate on the first business day of the month + 5.0%

federalregister.gov

FY 2027 upfront guaranty fee (maturity over 12 months)

3% of guaranteed portion for $150,001 to $700,000; 3.5% of guaranteed portion up to $1,000,000 plus 3.75% above $1,000,000 for $700,001 to $5,000,000; 0.25% for maturities of 12 months or less

legacy.sba.gov

FY 2027 upfront fee relief

0% upfront fee for loans of $700,000 or less to manufacturers (NAICS 31-33), listed food supply chain NAICS codes and businesses located in a rural area

legacy.sba.gov

FY 2027 lender's annual service fee

0.55% of the outstanding guaranteed portion; may not be passed to the borrower

legacy.sba.gov

Minimum debt service coverage

1.15:1 on a historical and/or projected basis and 1:1 on a global basis

legacy.sba.gov

Change of ownership debt service coverage

Initial Acquisition 1.25:1; Business Expansion 1.15:1; Owner Buyout 1.25:1; ESOP and Cooperative 1.25:1

legacy.sba.gov

Minimum equity injection

10% of total project cost for start-ups (operating 1 year or less); 10% for changes of ownership, which cannot be reduced for Initial Acquisitions

legacy.sba.gov

Quality of Earnings report

Required for Initial Acquisition and Business Expansion purchases of $3 million or more, in addition to the business valuation

legacy.sba.gov

Packaging fee cap

Flat fee up to $2,500 without documentation; percentage fees capped at 5% for loans of $150,000 or less and 3% above, maximum $30,000

legacy.sba.gov

Subsidy recoupment fee

For maturities of 15 years or more, voluntary prepayments over 25% in any of the first 3 years: 5%, 3% and 1% of the prepayment

legacy.sba.gov

• Must be an operating business organized for profit, located and primarily operating in the United States, and created, organized or incorporated in the United States or its territories.legacy.sba.gov
• Must be small under SBA size requirements including affiliates, using either the industry size standard or the alternative size standard (tangible net worth not over $20 million and average net income after federal taxes not over $6.5 million for the prior 2 fiscal years).legacy.sba.gov
• Credit must not be available on reasonable terms from non-federal, non-state and non-local government sources, including the lender and the liquidity of 20% or more owners.ecfr.gov
• Since March 1, 2026, 100% of direct and indirect owners and all SBA-required guarantors must be U.S. citizens or U.S. nationals with their principal residence in the United States, its territories or possessions; lawful permanent residents and foreign or non-resident owners are ineligible, subject to a six-month lookback unless the ineligible person fully divests before the loan number is issued.legacy.sba.gov
• Not eligible if the applicant or an associate's business caused a prior loss to the federal government, though SBA may waive the rule case by case for owners who held less than 20% of the defaulted business, did not guarantee it and had no control; not eligible if the applicant or a non-supplemental guarantor has delinquent federal nontax debt.legacy.sba.gov
• Must not be a type of ineligible business, must have filed required federal tax returns, and the business and owners must not be on the OFAC sanctions lists. Businesses where a side agreement gives a non-guarantor investor control (for example certain search fund structures) are ineligible.legacy.sba.gov
• Must be creditworthy and demonstrate a reasonable ability to repay the loan from the cash flow of the business.sba.gov

• Lender must meet 13 CFR 120.410 (ability to evaluate, process, close, service and liquidate loans, open to the public, good character, supervised by a federal or acceptable state regulator or by SBA as an SBLC or NFRL) and execute SBA Form 750, Loan Guaranty Agreement, through its Lead District Office before submitting applications.legacy.sba.gov
• Preferred Lenders Program (PLP) delegated authority lets a lender approve Standard 7(a) loans without prior SBA review; initial PLP generally requires at least 10 SBA loans processed and fully disbursed in the prior 24 months, a request to DelegatedAuthority@sba.gov and execution of SBA Form 1347, for terms of up to 2 years.legacy.sba.gov
• PLP lenders must process loans under their delegated authority, but refinancing of the lender's own 7(a) loans must go through non-delegated processing (from November 11, 2026), and PLP authority may not be used to reduce the lender's existing credit exposure.legacy.sba.gov
• Lender must list 100% of direct and indirect ownership in the SBA loan system, certify that no owner or SBA-required guarantor is an ineligible person, enter each owner's date of birth, and check CAIVRS and retain the result.legacy.sba.gov
• Lender pays SBA the upfront guaranty fee within 90 days of approval for loans over 12 months (within 10 business days of the loan number for short-term loans) and the annual service fee monthly with SBA Form 1502; it may pass the upfront fee, but not the annual service fee, to the borrower.legacy.sba.gov
• Lender must report every SBA-guaranteed loan monthly on SBA Form 1502 to SBA's fiscal and transfer agent, whether or not a payment was received.legacy.sba.gov
• Lender must obtain IRS tax transcripts (through IVES or IRS Form 8821) and reconcile them with the applicant's financial data before first disbursement.legacy.sba.gov
• Fees charged to borrowers are limited to those in 13 CFR 120.221 (packaging, extraordinary servicing up to 2% a year, out-of-pocket expenses, late fees up to 5% of the payment, assumption fees up to 1%); agent fees must be disclosed on SBA Form 159.legacy.sba.gov
• SBA charges 7(a) lenders annual oversight fees; for FY 2026 the rate was $128.19 per $1 million for non-delegated lenders and $144.64 per $1 million for delegated lenders.legacy.sba.gov
• 7(a) origination and guaranty sale functions are live in SBA's iCAP platform, alongside E-Tran in the Capital Access Financial System.sba.gov

• Cash flow is the primary source of repayment; if the analysis does not show reasonable assurance of timely repayment from business cash flow, the loan must be declined regardless of collateral.legacy.sba.gov
• Credit memo must cover business history and management, three years of historical financials plus an interim statement (or 2 years of projections for start-ups reaching 1.15 coverage within 2 years), EBITDA and global cash flow, pro forma balance sheet and ratios, working capital adequacy, collateral, insurance and the specific reasons credit is not available elsewhere.legacy.sba.gov
• Lender must review and analyze the personal credit report of every natural person who is a co-borrower or guarantor, regardless of ownership percentage, and evaluate the applicant's credit history; non-delegated submissions include a credit report dated within 90 days.legacy.sba.gov
• Every individual or entity owning 20% or more must give an unlimited full guaranty (SBA Form 148 or lender equivalent); trusts owning 20% or more in aggregate must each guarantee and the trustor must also guarantee personally.legacy.sba.gov
• Standard 7(a) loans must be fully secured by available fixed assets using SBA's valuation haircuts (for example improved real estate at up to 85% of market value, new equipment at 75% of price); if there is a shortfall the lender must take available equity in personal real estate of 20% or more owners when equity is 25% or more of fair market value. A loan may not be declined solely for inadequate collateral.legacy.sba.gov
• Equity sources may include unborrowed cash, gifts, qualifying personal loans, grants without clawbacks, full-standby debt and qualifying equity investments; investments the business must repay before the guaranty is released are treated as debt.legacy.sba.gov
• Changes of ownership follow Appendix 15: transaction category (Initial Acquisition, Business Expansion, Owner Buyout, ESOP and Cooperative), a lender-ordered business valuation, verification against seller tax transcripts, and total eligible debt capped at the valuation. Standby, seller and minority equity sources may provide no more than half the required injection, except up to 100% for veteran business acquisitions numbered from November 11, 2026 through September 30, 2027.legacy.sba.gov
• Commercial real estate appraisals must be by a state-licensed or certified appraiser (certified above $1,000,000), USPAP-compliant, prepared for the lender and dated within 12 months of the application.legacy.sba.gov

• SBA Form 1919Borrower Information Form: applicant, owner, loan request and eligibility certifications; a separate form for each co-borrowerOpen
• SBA Form 413Personal Financial Statement for owners of 20% or more and guarantors other than Supplemental Guarantors (lender's equivalent form accepted)Open
• IRS Form 4506-CIVES request for tax return transcripts used to verify the applicant's financial informationOpen
• IRS Form 8821Tax Information Authorization, the alternative to IVES for obtaining tax transcripts (lender must be the designee)Open
• SBA Form 148Unconditional Guarantee for owners of 20% or more (lender's equivalent form permitted for 7(a))Open
• SBA Form 148LUnconditional Limited Guarantee when a limited guaranty is usedOpen
• SBA Form 159Fee Disclosure and Compensation Agreement, required when an agent is paid or packaging fees exceed $2,500Open
• SBA Form 147SBA Standard Loan Note for 7(a) loansOpen
• SBA Form 1050Settlement Sheet (Use of Proceeds Certification) documenting disbursements and the borrower's equity injectionOpen
• SBA Form 155Standby Creditor's Agreement for debt on full standby counted as equity (lender's equivalent form permitted)Open
• SBA Form 722Equal Employment Opportunity poster that businesses receiving SBA financial assistance must displayOpen
• SBA Form 1502Monthly guaranty loan status and remittance report the lender files with SBA's fiscal and transfer agentOpen

• SOPSOP 50 10 8.1, Lender and Development Company Loan Programs (with Technical Policy Updates)Version 8.1Effective Oct 1, 2026legacy.sba.gov
• SOPSOP 50 10 document page (current and prior versions)legacy.sba.gov
• Rule13 CFR Part 120, Business Loansecfr.gov
• SOPSOP 50 56 1, Lender Participation RequirementsVersion 50 56 1Effective Aug 1, 2023legacy.sba.gov
• SOPSOP 50 57 4, 7(a) Loan Servicing and LiquidationVersion 50 57 4Effective Nov 1, 2025legacy.sba.gov
• Information noticeFY 2027 7(a) Program Fees (SBA Information Notice 5000-881797)Effective Oct 1, 2026legacy.sba.gov
• Rule7(a) Alternative Base Rate Options (91 FR 5805)Effective Mar 1, 2026federalregister.gov
• RuleMaximum Allowable 7(a) Fixed Interest Rates (87 FR 46883)Effective Aug 1, 2022federalregister.gov

• Nov 10, 2026Procedural notice

  Procedural Notice 5000-883564: equity flexibility for veteran business acquisitions and related SOP 50 10 8.1 revisions

  For changes of ownership where veterans will own at least 50% after the transaction, standby debt, seller debt on full standby and non-controlling minority equity may supply up to 100% of the required equity injection (normally capped at half) for loans that receive an SBA loan number from November 11, 2026 through September 30, 2027. The minimum injection itself is not reduced. The notice also limits refinancing of a lender's own 7(a) loan to non-delegated processing, requires review of personal credit reports for every natural-person co-borrower and guarantor regardless of ownership, and allows an evaluation instead of an appraisal for commercial real estate securing 7(a) Small and SBA Express loans unless related parties are involved or an appraisal is needed.

  What to do: For veteran acquisitions using this flexibility, record each owner's veteran status in the SBA loan system and identify every equity source by type, provider and amount in the credit memo. Route any refinance of your own 7(a) loan through non-delegated processing, and pull personal credit reports for all natural-person co-borrowers and guarantors.

  Effective Nov 11, 2026Read the source
• Sep 25, 2026Information notice

  SOP 50 10 8.1 issued with Technical Policy Updates (Information Notice 5000-882227)

  SBA replaced the SOP 50 10 8.1 text published in August with a version containing technical policy updates, effective for applications received on or after October 1, 2026. Changes include: trusts owning 20% or more in aggregate must each give an unlimited guaranty and the trustor must also guarantee; 7(a) Small and SBA Express may finance changes of ownership under Appendix 15 with an internal valuation allowed at a purchase price of $350,000 or less; working-capital true-ups are not seller rebates; special purpose property acquisitions may use a single loan up to 25 years; a buyer's existing QoE report may be used with a reliance letter or second review; mixed-purpose loans with 51% or more real estate may run up to 25 years; and the annual field examination for Working Capital CAPLines applies at $1,000,000 or more.

  What to do: Use SOP 50 10 8.1 with Technical Policy Updates for every application received on or after October 1, 2026, and SOP 50 10 8 for applications submitted through September 30, 2026. Until SBA updates its forms, collect the new certifications and information required by the SOP and keep them in the loan file.

  Effective Oct 1, 2026Read the source
• Sep 3, 2026Information notice

  FY 2027 7(a) fees (Information Notice 5000-881797)

  For 7(a) loans approved October 1, 2026 through September 30, 2027, the lender's annual service fee is 0.55% of the outstanding guaranteed portion. Upfront fees for maturities over 12 months are 2% of the guaranteed portion for loans of $150,000 or less, 3% for $150,001 to $700,000, and 3.5% up to $1,000,000 plus 3.75% above $1,000,000 for larger loans; short-term loans pay 0.25%. The upfront fee is 0% for loans of $700,000 or less to manufacturers (NAICS 31-33), listed food supply chain industries and businesses located in a rural area. SBA Express loans to veteran-owned businesses pay no upfront fee.

  What to do: Update pricing, fee disclosures and closing statements for FY 2027 approvals, check NAICS codes and rural location for the 0% upfront fee, document veteran eligibility in the file for SBA Express fee relief, and do not pass the annual service fee to the borrower.

  Effective Oct 1, 2026Read the source
• Aug 14, 2026Information notice

  SOP 50 10 8.1 announced (Information Notice 5000-880695)

  SBA announced SOP 50 10 8.1, which moves change-of-ownership lending into a new Appendix 15, adds flexibilities for SBA Express and same institution debt refinancing, and folds in the policy and procedural notices issued since SOP 50 10 8 (citizenship and residency, International Trade, 7(a) and 504 loan limit coordination, the prior loss waiver, MARC, the SBSS sunset and the alternative base rates).

  What to do: Train credit and closing staff on SOP 50 10 8.1, in particular Appendix 15 (changes of ownership), Appendix 14 (debt refinancing) and Appendices 16 to 20, which consolidate guaranty, maturity, interest rate, collateral and submission rules.

  Effective Oct 1, 2026Read the source
• May 28, 2026Policy notice

  Policy Notice 5000-879464: prior loss waiver for non-controlling minority owners

  SBA may waive the prior loss rule (13 CFR 120.110(q)) case by case when the only link to a prior loss on an SBA 7(a) or 504 loan is an owner who held less than 20% of the defaulted business, was not a guarantor or co-borrower on it, and had no control. The waiver does not cover losses on non-SBA federal loans, PPP or COVID EIDL, and delinquent federal nontax debt still makes the applicant ineligible.

  What to do: When CAIVRS or other checks show a prior SBA loss tied only to a non-controlling minority owner, request the waiver before approval and document the owner's equity share, guarantor status and lack of control.

  Effective Jun 1, 2026Read the source
• May 18, 2026Policy notice

  Policy Notice 5000-879058: coordination of 7(a) and 504 maximum loan limits

  SBA clarified that a borrower's outstanding 7(a) balance, up to the 7(a) maximum, does not reduce the 504 debenture limit, so a lender may approve a 7(a) loan first and a CDC may then approve a 504 loan. The 7(a) limits remain $5,000,000 per loan and $3,750,000 of total SBA guaranty outstanding to a borrower and its affiliates ($4,500,000 for qualifying export loans).

  What to do: When a borrower needs both programs, approve the 7(a) loan first and tell the processing center that a companion 504 application is coming.

  Effective Jul 4, 2026Read the source
• Apr 14, 2026Information notice

  FY 2026 oversight fee schedule for 7(a) lenders (Information Notice 5000-878182)

  SBA's Office of Credit Risk Management revised the annual oversight fee charged to 7(a) lenders for FY 2026 to $128.19 per $1 million for non-delegated lenders and $144.64 per $1 million for delegated lenders, the same rate for SBA-supervised and federally regulated lenders. SBA bills the fee annually.

  What to do: Budget for the revised oversight fee and pay SBA's invoice by its due date; unpaid oversight fees can affect participation and delegated authority.

  Effective Apr 14, 2026Read the source
• Mar 31, 2026Information notice

  FAQ guidance on the citizenship and SBSS sunset notices (Information Notice 5000-877673)

  SBA answered common questions on the March 1, 2026 changes. Ineligible persons may divest completely before the SBA loan number is issued; naturalized citizens with dual citizenship are eligible; existing loans with ineligible owners may be serviced but not increased. For 7(a) Small, lenders may still choose Standard 7(a) underwriting for loans of $350,000 or less, and a 1.10:1 debt service coverage ratio confirmed against two months of bank activity satisfies the repayment ability requirement.

  What to do: Apply the FAQ answers when structuring divestitures, servicing loans with former LPR owners and underwriting 7(a) Small loans without an SBSS score.

  Effective Mar 1, 2026Read the source

A bank, credit union or other regulated lender (or an SBA-licensed SBLC or non-federally regulated lender) contacts the lender relations specialist at its SBA district office, shows it meets 13 CFR 120.410 and signs SBA Form 750 to make 7(a) loans under non-delegated processing through the Loan Guaranty Processing Center. Lenders with enough SBA volume and satisfactory performance can then request PLP delegated authority from SBA's Office of Credit Risk Management at DelegatedAuthority@sba.gov.

• SBA district offices (lender relations specialists)
• SBA lender resources and 7(a) program information
• 7(a) loans program page