The 7(a) program is what most people mean when they say “SBA loan.” Of the 1,036,074 SBA 7(a) and 504 loans funded from fiscal year 2010 through March 31, 2026, 919,729 were 7(a) loans, or 88.8%. This guide explains how the program works, rule by rule, and then shows what those 919,729 loans actually looked like: how big they were, what rate they carried, how fast they funded, and how often they failed.
What a 7(a) loan is
A 7(a) loan is not a loan from the government. A bank, credit union, or SBA-licensed nonbank lender makes the loan, sets the rate within SBA limits, and services it. The SBA guarantees part of it: up to 85% of a loan of $150,000 or less and up to 75% of a larger loan, under 13 CFR 120.210. Across every 7(a) loan in the public record, the SBA’s guaranteed share averaged 74.8%.
The guarantee protects the lender, not the borrower. If the loan defaults, the SBA reimburses the lender for its share of the loss and the borrower still owes the full balance, now to the government. That mechanic, covered in how the SBA guarantee works, is why lenders will extend 10-year working-capital terms and 25-year real estate terms that conventional credit rarely offers.
What it can fund
Proceeds can go to working capital, inventory, equipment, leasehold improvements, owner-occupied commercial real estate, refinancing certain existing business debt, and a complete or partial change of ownership. What they cannot do, under 13 CFR 120.130, is pay past-due trust-fund taxes, fund passive real estate held for investment, pay distributions to owners, or refinance debt owed to a Small Business Investment Company. The site’s not-eligible pages cover the business types that are excluded outright.
How big 7(a) loans are
The cap is $5 million per loan. Since July 4, 2026, the SBA has also allowed a borrower who secures a 7(a) loan first to hold up to $5 million in 504 financing on top of it, for a combined $10 million; see SBA loan limits for the announcement.
The cap is not the norm. In fiscal year 2025, of the 78,072 7(a) loans in the record with a reported rate:
| Loan size | Share of FY2025 7(a) loans |
|---|---|
| $50,000 or less | 24.0% |
| $50,001 to $250,000 | 36.3% |
| $250,001 to $350,000 | 8.5% |
| More than $350,000 | 31.2% |
Only 583 loans were approved at exactly the $5 million maximum in FY2025, 0.7% of the year’s 7(a) volume. Who those borrowers are is the subject of who hits the $5 million ceiling.
Terms
13 CFR 120.212 sets the maturity rules: 10 years or less unless the loan finances real estate or equipment with a useful life beyond 10 years, and a hard maximum of 25 years including extensions. Equipment loans may add up to 12 months for installation. A loan that mixes purposes can carry a blended maturity weighted by use of proceeds. Balloon payments are not allowed. The median stated term across all 7(a) loans in the record is 120 months, exactly the working-capital and equipment ceiling; the full picture, including the 504 side, is in SBA loan terms.
Rates
Lenders negotiate the rate, subject to SBA ceilings that scale with loan size. Under 13 CFR 120.214 a variable rate may not exceed the base rate (prime, the SBA’s optional peg rate, or an approved alternative) plus 6.5 points on loans of $50,000 or less, 6.0 points up to $250,000, 4.5 points up to $350,000, and 3.0 points above that. A variable rate may first change on the first calendar day of the month after disbursement and no more often than monthly after that. Fixed rates are permitted under a separate SBA-published maximum.
What borrowers actually paid sits below the ceilings on most loans. In FY2025 the median initial rate was 10.25%, with the middle half between 9.5% and 10.99%. In the first half of FY2026 (loans approved October 1, 2025 through March 31, 2026) the median fell to 9.5%. About 87.6% of FY2025 loans carried a variable rate, and the fixed-rate minority priced lower: a median of 8.25% fixed against 10.25% variable. The current SBA loan rates page tracks the live ceilings, and fixed vs variable SBA rates explains the gap.
Fees
The SBA charges an upfront guaranty fee on the guaranteed portion, which lenders may pass to the borrower and usually finance into the loan. For fiscal year 2026 it runs from 2% to 3.75% by loan size, with 0% relief for small manufacturers and for veteran-owned SBA Express loans. Lenders also pay a 0.55% annual service fee that cannot be charged to the borrower. The full schedule and worked examples are on the SBA guaranty fee page, and packaging fees covers the one cost that depends on whom you hire.
The three ways a 7(a) loan is delivered
“7(a)” is an umbrella over several delivery methods with different sizes, guarantees, and paperwork:
- SBA Express: up to $500,000, a 50% guarantee, the lender makes the credit decision on largely its own forms, and revolving lines of up to 10 years are allowed. Express carried 403,992 loans in the record, 43.9% of all 7(a) volume. See SBA Express loans.
- 7(a) Small: term loans of $350,000 or less, with the standard 85% and 75% guarantees, no collateral required at $50,000 or below, and the lender’s own collateral policy above that. Since March 1, 2026 these loans are underwritten on the lender’s commercial credit analysis rather than a FICO SBSS pre-screen.
- Standard 7(a): loans above $350,000 up to $5 million, a 75% guarantee, and the SBA’s “fully secured” collateral standard.
Most Standard and 7(a) Small loans move through lenders holding Preferred Lender (PLP) delegated authority, which lets the lender approve without an SBA credit review. PLP loans were 380,880 of the record, 41.4% of 7(a) volume; together with Express, that is 85.3% of every 7(a) loan. On speed, the record is blunt: for loans approved in FY2024 and FY2025, the median time from SBA approval to first disbursement was 20 days overall, 18 days for PLP loans, 20 for Express, and 25 for loans processed through SBA’s general channel. Express is not faster after approval; its advantage is the lender’s decision. The lender-by-lender table is in how long an SBA loan takes.
Who qualifies
The business must be an operating, for-profit concern located in the United States, small under the SBA size standard for its industry (or under the alternative test of tangible net worth at or below $20 million and two-year average net income at or below $6.5 million, 13 CFR 121.301), unable to get the same credit on reasonable terms elsewhere, and creditworthy. Owners of 20% or more personally guarantee the loan. Under SOP 50 10 8 a Standard 7(a) applicant needs debt service coverage of at least 1.15 on historical or projected cash flow; a 7(a) Small applicant needs 1.1. Startups and complete changes of ownership require an equity injection of at least 10% of total project cost. The full checklist is in SBA loan requirements, with separate guides on credit, collateral, and the down payment.
How 7(a) loans perform
Of the 7(a) loans approved in fiscal years 2010 through 2017, all of which have now had at least eight years to season, 5.5% have been charged off. Failures cluster in years two through four; the median charged-off loan lasts 50 months. Loans under $50,000 charge off far more often than large ones, and 75.9% of all 7(a) loans were secured by collateral at approval. The patterns by lender, industry, and size are in SBA charge-off patterns, and every lender page on this site shows that lender’s own 7(a) charge-off rate, computed from the same record.
Where to go from here
If a 7(a) loan fits, the next decision is the lender, and lenders are not interchangeable. Lender match finds the ones that actually fund businesses like yours, the most active SBA lenders ranks them by track record, and how to apply walks the process step by step. If the money is going into owner-occupied real estate, compare the 504 loan first. Program rules follow the current SOP; SOP 50 10 8.1 takes effect October 1, 2026 and tightens the underwriting of business acquisitions, so confirm specifics with a participating lender.