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What is an SBA 7(a) Loan?

April 26, 2017loan SBA

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What is an SBA 7(a) Loan?

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• 7(a) loans are the most basic and often used loans of the SBA’s business loan programs. • 7(a) loans are only available on a guaranty basis. This means that they are provided by lenders who choose to structure their own loans in accordance with the SBA’s requirements and who apply and receive a guaranty from the SBA on a portion of the loan. The SBA does not fully guarantee 7(a) loans. The lender and SBA share the risk that a borrower will not able to repay the loan in full. The guarantee is against payment default. It does not cover imprudent decisions by the lender or misrepresentation by the borrower.