Real estate loans can be extended for up to a maximum of twenty-five years (twenty years for refinanced real estate loans).

Equipment loans can be extended for up to a maximum of fifteen years (though usually limited to ten) or to the expected useful life of the acquired equipment, whichever is shorter.

Working capital loans can be extended for up to seven years.

Lenders are guaranteed for up to 75% of the total loan amount (80% for loans under $100,000) to a maximum guaranty of $750,000. Most lenders will finance up to $1,000,000 under the 7(a) program although there is no actual limit on the size of the loan a lender may extend with a 7(a) guaranty.

Eligibility to participate in the 7(a) program is limited by a maximum level of either the borrower’s revenues or the total number of employees, as defined by the SBA, according to the borrower’s Standard Industrial Code (SIC) classification. A complete list of SIC classifications can be found in the Appendix with the corresponding SBA limitations.

Generally, most businesses that produce no more than $5 million in total revenues or have no more than five hundred employees are eligible for SBA assistance, although the industries that are limited by the number of employees can exceed $5 million in revenues. 7(a) loans provide for full amortization of the loan with no prepayment penalties.

There are several initiative programs under the umbrella of the 7(a) program that enable the borrower to obtain higher guarantees if the borrower qualifies. These special initiative programs are primarily intended to assist the private sector in accomplishing specific public policy objectives and involve the following borrower categories:

7(a) 11 Program—This loan program is for designated areas of high unemployment or concentrations of low income individuals.

Veterans Loan Program—This loan program is for Vietnam-era veterans.

Handicapped Assistance Loan Program—This loan program is for business owners who have a permanent mental, physical, or emotional handicap, or for nonprofit workshops operated for the benefit of handicapped individuals.

Contract Loan Program—This loan program is for short-term contract financing for entrepreneurs needing temporary financing during their growth stage.

Solar Energy and Conservation Loan Program—This loan program is for businesses that design, engineer, or manufacture equipment or systems to convert alternative sources of energy, provide for cogeneration of energy, or increase energy efficiency.

Employee Trust Loan Program—This loan program is for Employee Stock Ownership Plans (ESOPs) to finance employee-owned enterprises.

Pollution Control Loan Program—This loan program is for businesses involved in the planning, design, or installation of pollution-control facilities.

International Trade Loan Program—This loan program is for businesses that are pursuing international trade opportunities to accommodate their ability to engage in export sales and develop new markets for their products.

There are a few types of businesses that are ineligible to receive financing assistance from the SBA. In general these business activities include those based on a passive investment, those engaged solely in financing third parties, or those operating a purely speculative business activity.

Ineligible businesses include:

nonprofit corporations

gambling and illegal activities

investment real property

pyramid sales organizations

academic schools

speculation

lending or investment

lewd or prurient goods or services

* Source The SBA Loan Book

The comprehensive handbook for obtaining a Small Business Administration guaranteed loan.