The 7A Loan Guarantee Program is one of SBA's primary lending programs. It provides loans to small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders that provide loans which are, in turn, guaranteed by the SBA - the agency has no funds for direct lending or grants. For those applicants that meet the SBA's credit and eligibility standards, the agency can guarantee up to eighty percent of loans of $100,000.00 and less, and up to seventy-five percent of loans above $100,000.00 (generally up to a maximum guarantee amount of $750,000.00). Repayment ability from the cash flow to business is a primary consideration in the SBA loan decision process but good character, management capability, collateral, and owner's equity contributions are also important considerations. All owners of twenty percent or more are required to personally guarantee SBA loans.
