General Use 7(a) Rates, Terms and Fees
SBA 7(a) loans don’t have a minimum loan amount and have a maximum business amount of $5 million. The SBA guarantees up to 85% on loans $150,000 or less, and will guarantee up to 75% on loans up to $5 million. Therefore, under the SBA 7(a) program, the maximum exposure on an SBA-enhanced facility is $3.75 million.
Rates are negotiated between the SBA lender and borrower, but the SBA loan rate is composed of two parts: based rate and allowable spread. The base rates is based upon either the WSJ prime rate, London Interbank One Month Prime plus 3% or SBA peg rate). Terms for an SBA loan range from 7 years for working capital, to 10 years for equipment or machinery finance, and 25 years for the purchase or refinancing of real estate. If there is a mix use for the facility, the term and be constructed using a combination.
Any loan over $150,000 in which an SBA guarantee is used, is assessed an SBA fee. The lender usually pays this fee upfront, but may pass off the fee to the borrower. On loans over $150,000, fees can range from 0.25% up to 3.75%.