A Guide to SBA 7a Loans

SBA 7(a) Loans: A White Paper

An exhaustively researched guide to SBA 7a loans.
(view our white paper sources

(use the links on the right for specific SBA topics)

SBA 101

The SBA doesn’t lend money, it simply provides lenders with a partial guaranty so they are more willing to give a ‘less than perfect borrower’ a loan. If you default, the lender is partially covered – for up to 85% of the loan.  And according to Senator’s James Risch’s June 2018 SBA report, “the program currently operates at zero cost to taxpayers, with costs covered by borrower and lender fees.”

The SBA’s 7a loan guaranty program is the agency’s flagship loan program, named after Section 7(a) of the Small Business Act of 1953, which authorizes the SBA to provide business loans and loan guarantees to American small businesses. Roughly 80% of all SBA lending is through the 7a program.

  • Amounts up to $5MM to eligible businesses
  • Terms up to 10 years for business acquisition and expansion
  • Terms up to 25 years for owner-occupied real estate

Use the links to the right to learn more about how the SBA 7a loan program works and how to determine your eligibility and fit.

How Big is the SBA 7a Loan Program?

In Fiscal Year 2019 (October 1 – September 30, 2019), the SBA approved 51,907 7(a) loans totaling $23.2 billion, slightly less than the $25.4 billion approved in FY 2018 with a total of 60,354 loans (a significant drop).  In contrast, the SBA approved $5 billion in 504 loans in FY 2019, up slightly over 2018.

(Source – Report from the Congressional Research Service, primer on programs & funding updated 12/3/19 and the CRS SBA 7(a) program updated 10/15/19).

SBA 7a Program Growth Over Time

The importance of small business health and growth to the US economy is undisputed. Congress regularly approves legislation that increases the 7a program’s authorization limit on disbursements:

from $18.75 billion in FY2014
to $23.5 billion in FY2015
to $26.5 billion in FY2016
to $27.5 billion in FY2017
to $29.0 billion in FY2018
to $30.0 billion in FY2019

View our SBA White Paper sources.

SBA Leadership & Fun Facts

The SBA is currently run by Acting Administrator Chris Pilkerton while SBA staffers patiently await the senate confirmation of the current nominee, Jovita Carranza.  According to the rumor mill, since McMahon has the SBA running well operationally, Carranza plans to focus on cyber security for small businesses and possibly federal contracts.

Carranza was nominated by the president in April 2019 after Linda McMahon stepped down to run a super PAC supporting the president’s re-election campaign. Carranza’s appointment was submitted to the senate for confirmation in August of 2019, but she remains unconfirmed as of December, 2019. McMahon was approved in three weeks.

Fun Fact – 2017 presidential appointee and Senate-confirmed Linda McMahon was the former CEO of World Wrestling Entertainment, Inc. McMahon is the sixth female administrator (of 25) since the SBA’s formation in 1953. She unsuccessfully ran for a seat in the US Senate (CT) in 2010. To celebrate her 60th birthday she jumped out of an airplane.

Contact Us

You need a strategic, cost effective solution to your financing needs and a funding partner you can trust. And one who never takes upfront fees. Let us put our decades of banking and structuring experience to work for you. Contact Speritas Capital Partners about your eligibility for an SBA loan today.

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