The share of a 7(a) loan that SBA guarantees to the lender: up to 85 percent of a loan of $150,000 or less, up to 75 percent of a larger loan, and 50 percent on SBA Express.
The percentage is set by the size of the loan. A loan of $150,000 or less may carry up to 85 percent, a larger loan up to 75 percent of the whole loan, and an SBA Express loan 50 percent. SBA’s total guaranty to one business and its affiliates is capped at $3,750,000. The lender keeps the rest of the loan at its own risk.
Loans made within 90 days of each other to the same business and its affiliates are combined, even if different lenders made them. If the combined amount is over $150,000, the guaranty cannot exceed 75 percent of the total. Example from the SOP: an 85 percent guaranty on a $140,000 loan is $119,000. A second loan of $50,000 within 90 days makes the total $190,000, and 75 percent of that is $142,500. The second loan’s guaranty is therefore $23,500, or 47 percent.
SBA guarantees a 504 debenture in full, but the bank’s first-lien loan in a 504 project has no SBA guaranty.
How it shows up in the data here
The SBA file gives SBAGuaranteedApproval and GrossApproval, so the percentage is one divided by the other: a row with $400,000 and $300,000 is 75 percent. SoldSecMrktInd shows whether the loan was sold on the secondary market. The file does not show what the lender kept or at what price it sold.
Go further
- SBA 7(a) payment calculator: The guaranteed portion and the fee for a loan you enter.
- SBA 7(a) payment calculator: Monthly payment with the FY2027 upfront guaranty fee, with the fee paid in cash or added to the loan.
- SBA Preferred Lenders Program and Express: how they differ: Some SBA lenders decide a loan on their own authority and some send it to SBA first. The difference changes who reads your file and who carries the risk.
- SBA 7(a) or 504: which fits your loan: Both are SBA loans, and they work differently. The choice usually turns on what you are buying and how much cash you can put in.
Related terms
- SBA 7(a) loan: SBA's main business loan program. A lender makes the loan and SBA guarantees part of it: up to 85 percent of $150,000 or less and 75 percent of more, on loans up to $5,000,000.
- SBA Express loan: A 7(a) loan of $500,000 or less that only a lender with SBA Express authority can make, on its own credit decision, with a 50 percent SBA guaranty.
- Upfront guaranty fee (SBA 7(a)): The one-time fee a 7(a) lender pays SBA for its guaranty, set by loan size and charged on the guaranteed portion. The lender may pass it on to the borrower.
- Annual service fee (SBA lender's fee): A yearly fee a 7(a) lender pays SBA on the outstanding balance of the guaranteed portion of each loan. On a 7(a) loan the lender may not pass it on to the borrower.
- SBA 7(a) Small loan: A 7(a) term loan of $350,000 or less. The lender may use its own forms and credit memo for much of the file, and the debt service coverage floor is 1.10 to 1.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.