SBA 7(A) Loan Program

The Small Business Administration (SBA) 7(a) loan program provides a repayment to banks making loans under this program. This allows the lender to recover a portion of what it lent from the SBA if the borrower can't make the payments. The borrower is still obligated for the full amount. The reduced risk permits lenders to give small business owners access to the same kinds of reasonably priced, long-term financing available to large businesses.

The SBA only guarantees a portion of any particular loan so each loan will also have an unguaranteed portion giving the lender a certain amount of exposure and risk. The percentage of guaranty depends on either the dollar amount or the method by which the lender obtains its guaranty. For 7(a) loans of $150,000 or less the SBA will guaranty as much as 85% and for loans over $150,000 the SBA can provide a guaranty of 75%. The maximum loan amount is $2 million and the maximum guaranty amount to any one business is $1.5 million.

Contact the Oakland County Business Center (MI-SBTDC)