The SBA 7(a) loan program is the primary loan program offered by the Small Business Administration to help small businesses secure financing that they may not be able to get through traditional lending channels. The program provides loans of up to $5 million to eligible small businesses for a variety of purposes, such as working capital, equipment purchases, real estate acquisitions, debt refinancing, and business acquisitions. There are nine different 7(a) loan programs, each with various degrees of effectiveness as it relates to supporting jobs within a community.
| SBA 7(a) Loan Program | Total Loan $$ | # of 2022 Loans | Average Loan | Jobs Supported | Loans/Jobs |
|---|---|---|---|---|---|
| FA$TRK (Small Loan Express) | $1,358,436,000 | 13,514 | $100,521 | 83,772 | $16,216 |
| Community Advantage Initiative | $71,142,900 | 455 | $156,358 | 2,873 | $24,763 |
| Standard Asset Based | $104,136,500 | 109 | $955,381 | 3,004 | $34,666 |
| Seasonal Line of Credit | $6,204,400 | 6 | $1,034,067 | 125 | $49,635 |
| Guaranty | $18,317,838,400 | 20,810 | $880,242 | 277,897 | $65,916 |
| Contract Guaranty | $16,606,000 | 14 | $1,186,143 | 189 | $87,862 |
| International Trade - Sec, 7(a) (16) | $217,786,300 | 108 | $2,016,540 | 2,305 | $94,484 |
| Revolving Line of Credit Exports - Sec. 7(a) (14) | $97,100,000 | 42 | $2,311,905 | 851 | $114,101 |
| Small General Contractors - Sec. 7(a) (9) | $16,975,000 | 7 | $2,425,000 | 91 | $186,538 |
1. Community Advantage: This loan program is designed to help small businesses in underserved communities, including women, minorities, and veterans. The loan amount can go up to $250,000, and the SBA provides a 85% guaranty for loans up to $150,000 and a 75% guaranty for loans above that amount. Last year, there were 455 CA loans supporting 2,873 jobs.
2. Contract Guaranty: This loan program is for small businesses that need funds to fulfill contracts with the federal government. The SBA provides a guaranty of up to 90% of the loan amount, which can go up to $10 million.
3. FA$TRK (Small Loan Express): This program is designed to provide quick and easy financing to small businesses with a maximum loan amount of $350,000. The turnaround time for loan approval is usually within 36 hours. Fast Track loans provide the highest capital efficiency for economic development of all SBA 7(a) loan programs – it only took $16,216 to support one job in 2022.
4. Guaranty: The guaranty program is the flagship SBA 7(a) loan program. It provides financing for small businesses that are unable to secure traditional financing. The SBA provides a guaranty of up to 85% of the loan amount, which can go up to $5 million.
5. International Trade – Sec, 7(a) (16): This loan program is designed to help small businesses that engage in international trade. The loan amount can go up to $5 million, and the SBA provides a guaranty of up to 90% of the loan amount.
6. Revolving Line of Credit Exports – Sec. 7(a) (14): This program provides a revolving line of credit to small businesses that export goods. The loan amount can go up to $5 million, and the SBA provides a guaranty of up to 90% of the loan amount.
7. Seasonal Line of Credit: This loan program is designed to help small businesses that have seasonal fluctuations in cash flow. The loan amount can go up to $5 million, and the SBA provides a guaranty of up to 85% of the loan amount.
8. Small General Contractors – Sec. 7(a) (9): This program provides financing to small businesses that are general contractors or subcontractors in the construction industry. The loan amount can go up to $5 million, and the SBA provides a guaranty of up to 85% of the loan amount. The Small GC loan program is the least capital efficient – it took $186,538 to support one job on average in 2022 with the program.
9. Standard Asset Based: This loan program is designed to help small businesses that need financing for working capital or to purchase inventory or equipment. The loan amount can go up to $5 million, and the SBA provides a guaranty of up to 75% of the loan amount.