What are Section 7(a) SBA Loans?
Section 7(a) loans are the most basic and most commonly issued loan in the SBA loan program. All 7(a) loans are provided by participating lenders and are only available on a guarantee basis. This means they are provided by lenders who choose to structure their own loans according to the SBA’s requirements and who apply and receive a guarantee from SBA on a portion of this loan. The SBA does not fully guarantee 7(a) loans, thus the lender and the SBA share the risk if the borrower is not able to repay the loan. A key concept of the 7(a) guarantee loan program is that the loan actually comes from a commercial lender, not the Government. If the lender is not willing to provide the loan, even if they may be able to get an SBA guarantee, the SBA can not force the lender to change its mind. II. How Do You Obtain a 7(a) Loan? To obtain a 7(a) Loan, the applicant must first meet the eligibility requirements specified by the SBA. The eligibility requirements are designed to be as broad as possi
