The 7(a) Loan Program, SBA’s most common loan program, includes financial help for businesses with special requirements.
SBA provides loans to businesses; so the requirements of eligibility are based on specific aspects of the business and its principals. As such, the key factors of eligibility are based on what the business does to receive its income, the character of its ownership and where the business operates.
SBA generally does not specify what businesses are eligible. Rather, the agency outlines what businesses are not eligible. However, there are some universally applicable requirements. To be eligible for assistance, businesses must:
A business must be engaged in an activity SBA determines as acceptable for financial assistance from a federal provider. The following list of businesses types are not eligible for assistance because of the activities they conduct:
There are also eligibility factors for financial assistance based on the activities of the owners and the historical operation of the business. As such, the business cannot have been:
Special considerations apply to some types of businesses and individuals, which include:
If you are awarded a 7(a) loan, you can use the loan proceeds to help finance a large variety of business purposes. However, there are a few restrictions. For example, proceeds can’t be used to buy an asset to hold for its potential increased value or to reimburse an owner for the money they previously put into their business.
Basic uses for 7(a) loan proceeds include:
There are two 7(a) loan process options with different time frames. In addition to standard procedures, SBAExpress processing offers an expedited turnaround.
SBAExpress gives small business borrowers an accelerated turnaround time for SBA review. A response to an application will be given within 36 hours. SBAExpress generally follows SBA’s standards for the 7(a) loan program.