7(A) Loan Guarantees
SMALL BUSINESS ADMINISTRATION
Small Business Act of 1953, Section 7(a), as amended, Public Law 97-35.
To provide guaranteed loans from lenders to small businesses which are unable to obtain financing in the private credit marketplace, but can demonstrate an ability to repay loans if granted, in a timely manner. Guaranteed loans are made available to for profit small businesses. The SBA's 7(a) lending authority includes: (1) regular 7(a) (2) the Low Documentation Loan Program (Low Doc); (3) SBAExpress Program; (4) the Cap Line Program (5) PLP and (6) International Trade.
Types of Assistance
Guaranteed/Insured Loans (including Immediate Participation Loans).
Uses and Use Restrictions
To construct, expand, or convert facilities; to purchase building equipment or materials; and for working capital. Excludes gambling establishments, nonprofit enterprises, speculators in property, lending or investment enterprises, and financing of real property held for investment; also excludes funds to indiscriminately relocate the business. Funds must not otherwise be available on reasonable terms, nor used to pay off a loan to an unsecured creditor who is in a position to sustain loss.
Small businesses that meet the size and eligibility standards.
Application and Award Process
None. This program is excluded from coverage under E.O. 12372.
Applications are filed by the participating lender to an SBA processing center (85 percent). Fifthteen percent are processed by an SBA district office.
Applicant is notified by authorization letter from the District SBA Office, or participating bank.
Range of Approval/Disapproval Time
From one to ten days from date of application acceptance, depending on type of loan and type of lender program.
If a reconsideration is requested within six months after decline or withdrawal, no new application is required.
Formula and Matching Requirements
Length and Time Phasing of Assistance
Post Assistance Requirements
Periodic financial statement.
When necessary, on a case-by-case basis.
Adequate accounting system.
Loan Guarantees: FY 07 $13,517,000,000; FY 08 $17,500,000,000; FY 09 $17,500,000,000. Administration: FY 07 $41,822,000; FY 08 $43,942,000; and FY 09 $48,027,000.
Range and Average of Financial Assistance
Guarantee Loans: Up to $2,000,000. Average loan size was $143,492 in FY 2007.
In FY 2007, 99,607 loans were approved for $14.3 billion.
Regulations, Guidelines and Literature
"SBA Business Loans from the SBA," OPC-6.
Regional or Local Office
Initial contact should be with the District Offices listed in Appendix IV of the Catalog.
Director, Office of Financial Assistance, Small Business Administration, 409 Third Street, SW., Washington, DC 20416. Telephone: (202) 205-7562.
Web Site Address
Examples of Funded Projects
Criteria for Selecting Proposals