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SBA 7(a) loan package checklist

A 7(a) package is the bank's usual file plus SBA's own list. Know which items SBA requires and you can have them ready before the first call.

By Research desk, The Lender Report ·Sources reviewed · 9 minute read · For Brokers, Borrowers

The short answer

SBA's list starts with a borrower information form (Form 1919), a personal financial statement from each 20 percent owner and guarantor, three years of business statements or returns, a current interim statement and a debt schedule. The lender orders the IRS transcripts itself. Add the purchase agreement and appraisal for real estate, or a valuation for a business purchase. Every lender also adds items of its own; SBA sets none of those.

How big a package you need

SBA writes one list for every 7(a) loan and lets the lender trim it for small loans. A 7(a) Small loan is $350,000 or less. An SBA Express loan is $500,000 or less. Anything larger is a Standard 7(a) loan and carries the full list. For Small and Express loans the lender may use its own forms and credit memo to the maximum extent practicable. Most requests are small: for Oct 2023 through Sep 2026, 65% SBA FOIA, of 7(a) loans were $350,000 or less.

The steps below follow the order lenders usually ask. Where SBA sets an item, the SOP part is named. Items only the lender sets carry no number, because lender policy is not published. Ask for the lender’s checklist in writing.

Step 1: eligibility, before any documents

Eligibility can end a request before anyone reads a financial statement, so SBA tells the lender to settle it early. Have these facts ready.

  • Size. The business and its affiliates must be small. SBA offers an alternative to the industry standard: tangible net worth of $20 million or less and average net income after federal tax of $6.5 million or less over the two prior full fiscal years.
  • Kind of business. Lenders, passive landlords and some other types are out. A building held in a separate company works only as an eligible passive company: a written lease of 100 percent of the space to the operating company, at rent no higher than the loan payment plus holding costs.
  • Every owner. The lender lists 100 percent of direct and indirect owners. Each owner and each required guarantor must be a U.S. citizen or U.S. national with a principal residence in the United States, its territories or possessions. SBA looks back six months for an owner who does not qualify.
  • Franchise. A brand that meets the FTC definition of a franchise must be on the SBA Franchise Directory. If it is not, the lender cannot send the request to SBA or make the loan on its own authority.
  • Federal debt. The lender checks CAIVRS for a prior loss to the federal government or delinquent federal nontax debt, for the business, its associates and its guarantors. A debt that is fully satisfied can be documented and the request can go on.
  • Existing SBA loans. A business whose 7(a) or 504 loan is not current when the new loan number is issued is ineligible. Not current means a required payment has been unpaid for more than 29 days.
  • Credit not available elsewhere. The lender must say why some or all of the money is not available on reasonable terms elsewhere. It cannot cite its own score policy as the only reason. See the credit elsewhere test.

Step 2: the documents, in the order requested

What SBA requires in the file, by step

Step Item Where in SOP 50 10 8.1
Owners Form 1919, one per co-borrower, signed by the business Appendix 20, A.1
Owners Form 413 or the lender’s own statement, signed and dated within 90 days, from each 20 percent owner and each guarantor except a supplemental guarantor. Include a spouse’s and minor children’s assets for the owner Section A, Chapter 5, A; Appendix 20
Business Statements or tax returns for the last 3 years, with a detailed debt schedule and a profit and loss statement for each year Appendix 20, A.1
Business Interim balance sheet and profit and loss, dated within 120 days of submission, for the business and any affiliates Appendix 20, A.1
Tax proof IRS transcripts, ordered by the lender with Form 4506-C or Form 8821 Section A, Chapter 5, B
Use of proceeds A list of equipment to be bought with quotes, a list of every asset bought with proceeds, and a list of all collateral Appendix 20, A.1
Premises The signed lease, if the business rents Appendix 20, A.1; Section A, Chapter 3, C
Franchise The executed franchise agreement and every document the franchisor requires, before any disbursement Section A, Chapter 1, G
Fees Form 159 for any lender fee above $2,500 and for any agent Section B, Chapter 6, D

Three details trip people. The lender, not the business or its tax preparer, files the IRS authorization on Form 8821, and SBA will not accept one filed by the borrower’s preparer. Except on SBA Express loans, a statement that disagrees with the return must be reconciled before the first disbursement, so hand over the filed version. And the transcripts reach back three years under the industry size standard and two under the alternative one, less a latest year that ended within six months of the lender’s request to SBA.

Step 3: the cash flow tests SBA sets

SBA sets floors for repayment from the business’s own cash flow. The lender’s policy may be higher.

  • A Standard 7(a) loan needs debt service coverage of 1.15 to 1 on a historical or projected basis, and 1 to 1 on a global basis that includes the owners’ other income and debts.
  • A 7(a) Small loan needs 1.10 to 1, historical or on 12-month projections that reach 1.10 within one year.
  • On a Standard loan, a start-up or other projection-based request needs detailed projections, with assumptions, that reach 1.15 within two years of funding.
  • A purchase of a business has its own floors, in Step 6.

For a 7(a) Small loan the lender also reviews two months of bank activity on the primary operating account, to confirm every debt is in the coverage calculation.

Looking for a lender now? Find lenders for this in your state or see SBA 7(a) lenders state by state.

Step 4: collateral and guaranties

Every owner of 20 percent or more gives an unlimited guaranty. A spouse who owns less must guarantee too when the couple and their minor children together own 20 percent or more. SBA’s rule is that a request must not be declined only because collateral is inadequate, and that its guaranty is no substitute for collateral the borrower has.

For a Standard 7(a) loan the lender tests whether the loan is fully secured. It counts each asset at a fraction of its value.

How SBA counts collateral when it tests whether a Standard 7(a) loan is fully secured

Asset Counts at no more than
Improved real estate 85% of market value
Unimproved real estate 50% of market value
New machinery and equipment 75% of price, less prior liens
Used machinery and equipment 50% of net book value, or 80% with an orderly liquidation appraisal, less prior liens
Furniture and fixtures 10% of net book value or appraised value
Receivables and inventory, if the lender takes them 10% of current book value

When the loan is not fully secured, the lender must take available equity in real estate that the owners and guarantors own personally, unless that real estate has less than 25 percent equity. The lien can be limited to the shortfall or to 150 percent of the equity. A 7(a) Small or Express loan of $50,000 or less needs no collateral.

Step 5: reports the lender orders

  • Appraisal. For real estate bought with proceeds, the appraiser is independent, State-licensed or State-certified, and State-certified above $1,000,000. The report follows USPAP, is dated within 12 months, and names the lender as client. The lender cannot use one ordered by the seller or the borrower, though you can be charged for it. If the value comes in under 90 percent of the lender’s estimate, the lender needs SBA’s permission to close, except a PLP lender, which documents its reasons.
  • Environmental. Up to $250,000 the review may start with a questionnaire. Above that it starts with a questionnaire and records search with a risk assessment. A property in an environmentally sensitive industry starts with a Phase I at any size, and gas stations (NAICS 457) have extra steps. Reports must be dated within one year of the loan number.
  • Premises. If the business rents, and leasehold improvements reach $500,000 or 30 percent of proceeds (whichever is less), the lender needs a copy of the lease. Its term, with renewal options the borrower alone can use, should run as long as the loan.
  • Occupancy. To buy or improve a building, the business must occupy 51 percent of an existing one, or 60 percent of a new one, and may lease the rest within the limits of 13 CFR 120.131. The lender can allow up to a year after closing to reach the share.
  • Coverage and flood. SBA requires hazard coverage on pledged collateral, with small-loan exceptions, and a flood determination. Ask the lender for the threshold that applies to your loan.

Step 6: buying a business

A change of ownership loan has the heaviest package. The valuation is for the lender, from a Qualified Source: an individual accredited by one of five named valuation bodies, independent of the loan. The lender may do its own valuation if the Business Purchase Price (the price with owner-occupied real estate taken out) is $350,000 or less and buyer and seller are not closely related. At $3 million or more, an Initial Acquisition or a Business Expansion also needs a quality of earnings report.

The rules a seller should hear early:

  • No earnout. A rebate to the buyer for performance is allowed.
  • In a sale of the business, the seller may stay on only as a consultant, for no more than 24 months in all.
  • Debt for the business portion amortizes over no more than 10 years.
  • Coverage must reach 1.25 to 1 for an Initial Acquisition or an owner buyout, and 1.15 to 1 for a Business Expansion, with 1 to 1 on a global basis.
  • The minimum equity injection is 10 percent of total project cost. Cash that is not borrowed counts in full. Seller debt on full standby counts for no more than half of the required amount.

Worked example (hypothetical). A buyer pays $900,000 for a dental practice with no real estate. Add $75,000 of working capital and $25,000 of valuation and closing costs, and total project cost is $1,000,000. The 10 percent minimum is $100,000. The buyer puts in $60,000 in cash and the seller carries a $40,000 note on full standby. The note is within half of $100,000, which is $50,000, so the test is met. The loan is $1,000,000 less $100,000, or $900,000. At a 75 percent guaranty the guaranteed portion is $675,000. The lender then needs a valuation that supports $900,000, and cash flow at 1.25 times debt service for an Initial Acquisition. If yearly debt service is $150,000, cash flow after the lender’s justified adjustments must reach $187,500.

The lender verifies the cash with a check or wire and proof it cleared, plus at least 30 days of statements from the paying account. A gift letter or a note alone does not do it. Fees paid to an agent, and education or advisory expenses, are not equity.

Refinancing business debt

The lender needs the notes, security agreements and leases for each debt, 12 months of transcripts showing it is current, and a written reason for any late payment. The new payment must be at least 10 percent below the old one, with listed exceptions. A merchant cash advance qualifies only after it was converted to a term loan and has amortized for at least 24 months.

What lenders add on their own

SBA sets the floor. A lender may also require its own forms, minimum ratios, deposit relationships, personal liquidity and time in business. Those are the lender’s policy, they differ, and none is published. Ask for the checklist in writing before you gather documents. Meeting every item does not mean the lender will make the loan: SBA sets minimums and the lender decides.

What the public record can and cannot tell you

The SBA loan file shows who made 7(a) loans, how large they were, the industry and how SBA processed each one. For Oct 2023 through Sep 2026, it holds 175,022 SBA FOIA, loans. It does not show the package behind any loan, and it does not show which lenders are taking requests now. Use it to pick lenders that work at your size, then ask them for the list.

Terms used here

  • 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 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.
  • 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.
  • SBA Form 1919 (Borrower Information Form): The form each 7(a) co-borrower signs and gives the lender. It reports employees and jobs and the purpose of the loan, and the lender keeps the signed form and enters its data into SBA's system.
  • SBA Form 413 (Personal Financial Statement): SBA's personal financial statement. Each 20 percent owner and each guarantor except a supplemental guarantor gives one, or the lender's own equivalent, signed and dated within 90 days.
  • IRS tax transcript (Form 4506-C and 8821): The IRS record of a filed return that an SBA lender orders itself, with Form 4506-C through IVES or Form 8821, to check the numbers it was given.
  • Equity injection (SBA): The cash or other equity an owner puts into an SBA-financed project. A 7(a) start-up or business purchase needs at least 10 percent of total project cost; a 504 project needs 10, 15 or 20 percent.
  • Change of ownership loan (SBA 7(a)): A 7(a) loan that finances buying an existing business or an owner's share of it. SBA requires an independent valuation, 10 percent equity and, for a new owner, debt service coverage of 1.25 to 1.
  • Credit elsewhere test (SBA): SBA's rule that a loan is eligible only if the business cannot get some or all of the money on reasonable terms elsewhere. The lender must certify it and explain why in its credit memo.
  • SBA Franchise Directory: SBA's list of franchise brands it has reviewed and found eligible. A brand that meets the FTC definition of a franchise must be on it for the loan to go ahead.
  • SBA collateral requirements (7(a)): SBA's rules for what a 7(a) lender must take as collateral and how each asset counts, such as improved real estate at 85 percent of value. A request must not be declined only for thin collateral.
  • SBA occupancy requirement: The rule that a business using SBA money on real estate must occupy at least 51 percent of an existing building, or 60 percent of a new one, and may lease out the rest within set limits.

Sources

Every rule and outside figure above comes from one of these, opened on . Dates are the source's own. Figures from this site's data carry their own source and date beside them.

  1. SBA SOP 50 10 8.1, Lender and Development Company Loan Programs (Section A, Chapters 1 to 5; Section B, Chapters 1, 2 and 6; Appendices 14, 15, 16, 17, 19 and 20), effective .
  2. SBA Information Notice 5000-881797, 7(a) fees for fiscal year 2027, published .
  3. 13 CFR 120.131, leasing part of a building to another business, retrieved .
  4. 13 CFR 120.151 and 120.210, loan limit and guaranty percentage, retrieved .

Next step: check the record

Keep reading

Questions people ask

Does SBA require a business plan for a 7(a) loan?

The SOP's list for a domestic 7(a) request does not name one. It does require detailed projections with their assumptions for a start-up or any request that rests on projections. A lender can still ask for a plan; that is its own policy.

What credit score does SBA require for a 7(a) loan?

SOP 50 10 8.1 states no minimum score. It requires the lender to analyze credit history and to explain the credit decision in its memo. Any minimum is the lender's own policy, so ask for it in writing.

Cite this

Source: The Lender Report, SBA 7(a) loan package checklist, https://lender.report/guides/package-checklist-sba-7a/, data as of November 9, 2026.

General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.

SBA does not require you to use an agent or broker for a loan application. SBA has not reviewed or endorsed this site.

Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem