SBA 7 A Loans

What can an SBA 7(a) Loan be used for?

Our SBA 7(a) loan program is the most flexible of the SBA loan options and can be used for a multitude of things that can help propel your business forward. With such a variety of uses, SBA 7(a) loans continue to be the best options for owners of small to midsized businesses looking to fund the growth of their company.

Business Acquisitions
Working Capital
Franchise Purchases
Renovations
Ground-Up Construction
Commercial Real Estate
Business Debt Refinancing
Equipment Purchases
Start Up Projects
Partner Buyouts
Business Expansion
Business Debt Consolidation

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SBA 7(a) Frequently Asked Questions

Please reach us at CHRIS@FOSTERRE.COM if you cannot find an answer to your question.

Who is Eligible for the SBA 7(a) Loan?

For-profit, non-publicly traded businesses
Tangible business net worth (including affiliates) not to exceed $15 million
Average net income of the business not to exceed $5 million over the previous two years
Ownership must generally be comprised of 51% U.S. citizens or Legal Permanent Residents
Proceeds must directly benefit the small business

Who is NOT Eligible for the SBA 7(a) Loan?

Non-profits (except sheltered workshops)
Passive holders of real estate and/or personal property
Lending institutions (mortgage brokers and correspondent lenders are eligible)
Life insurance companies (franchised agents are eligible)
Businesses located in a foreign country
Businesses selling products or services through a pyramid plan
Gambling concerns
Businesses which restrict patronage
Government owned entities (excluding Native American tribes)
Consumer and marketing cooperatives (producer cooperatives are eligible)
Businesses engaged in loan packaging
Businesses that have previously defaulted on a Federal loan
Businesses engaged in political or lobbying activities

What can a 7(a) loan NOT be used for?

Transactions that do not directly benefit a subject business (investment-only transactions)
“Cash out” transactions
Refinancing owner debt or providing funds to a person or owner
Buying into a business where the seller remains a part owner (business acquisitions must result in a 100% change of ownership)

What are the benefits of an SBA 7(a) Loan?

Longer-term financing than conventional loans (up to 25 years)
Fully-amortizing loans with no balloons, which removes the need to seek reapproval (or new financing) every few years
A smaller down payment than conventional financing, which allows you to conserve working capital
Proceeds to cover all of your business needs, including ground-up construction and business expansion
No financial covenants, other than providing annual tax returns and financial statements
Prepayment penalty is minimal or nonexistent
Loan payments cannot be accelerated as a result of an economic downturn as long as you make your payments on time

SBA 7 (a) Loans

What can an SBA 7(a) Loan be used for?

Ready to Move Your Business Forward?

SBA 7(a) Frequently Asked Questions

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