SBA 7(a) financing, in plain language.

Typical terms for this program are a 10-year term, 10% down, based on a spread not to exceed 3.00% over WSJP (the Wall Street Journal Prime rate). For real estate loans, the term can go up to 25 years. Please note these are high-level terms — each lender will have a range based on their specific credit underwriting guidelines.

Yes, you may have one loan for many different uses of proceeds. The term of the loan will be a blended amortization based on a weighted average term for each use of proceeds. Including multiple uses of proceeds into one loan can help the small business owner lower monthly payments.

Typically, the following documents, depending on if the business has existing operations or if it is a start-up, will need to be presented:

• 3 years of business historical tax returns (if the latest return isn't filed or is on extension, provide that year as an internal P&L)
• Current YTD interim P&L
• Current business balance sheet
• Current business debt schedule
• A/R report (if applicable)
• Personal Financial Statement — please use SBA Form 413 (download PDF)
• 3 years of personal tax returns with all schedules
• Resume of owners
• Any letters of intent (lease, real estate purchase, business purchase)
• Business plan (if startup)
• Business projections (if startup)

Most lenders will also have some extra bank-specific forms to complete, like a loan application. It is highly important that you complete all forms as detailed and accurately as possible.

Required down payment is based on use of proceeds. Expect at least 10% of total project costs, although for startup business loans expect a 15%–25% down payment. Some types of financing requests may not have a down payment requirement — like debt refinance, permanent working capital, rent replacement, and partnership buyouts.

No — the loan will roll in all costs and fees, so you are not coming out of pocket other than your required down payment.

No. In fact, most SBA 7(a) loans are only partially or minimally secured with the small business assets. There is no requirement for the loan to be secured based on the loan amount.

The maximum loan amount for your specific request will be greatly determined by the business cash flow — historical or projected — and the ability to repay at a minimum DSCR of 1.15x for most uses of proceeds, although some types of loan uses will have higher DSCR thresholds. Some lenders will have higher required ratios depending on risks such as industry, experience, etc. Most DSCR requirements should not exceed 1.35x.

Yes — all SBA 7(a) loans carry a full, unlimited personal guarantee for most owners.

Not necessarily, however, you will have a better chance of approval with these skills, or if you can show transferable skills and how those experiences translate to successfully operating a business in a specific industry. Franchises may be an exception, as you get the benefit of the franchisor's experience and support.

Much of the timeline depends on how quickly you can provide all required documentation and your specific use of proceeds. Business acquisitions can take 45–60 days, while a loan with a real estate component can take 75–90 days. Note that the approval and commitment step is a much shorter timeline, typically ranging from 2–3 weeks.

Yes, you may utilize the ROBS program to access your 401(k) for the small business loan down payment. You will need to reach out to a qualified ROBS consultant — we can refer you to a trusted source if you prefer.

We are happy to refer you to a local Small Business Development Center for help with documents like a business plan, projections, and proforma balance sheets — all free to you as a taxpaying citizen. We can also refer you to paid trusted sources like CPAs, attorneys, or life insurance companies if needed.

We will be happy to refer you to trusted alternative or conventional lending partners who may be able to help you with another avenue of financing.