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SBA may grant delegated authority to lenders to process, close, service, and liquidate certain 7(a) loans without prior SBA review.
Standard 7(a)
Standard 7(a) Loans are 7(a) loans that are greater than $500,000, and exclude 7(a) Small, SBA Express, Export Express, CAPLines, Export Working Capital Program (EWCP), International Trade loans, and Pilot Program loans.
These loans may be processed under Preferred Lender Program (PLP) delegated authority or non-delegated through the Loan Guaranty Processing Center (LGPC).
| Loan amount | $500,001 to $5 million |
| Maximum SBA guarantee % | 75% |
| Interest rate | Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum |
| Revolving lines of credit | Permitted only under SBA Express, Export Express, or CAPLines |
| SBA turnaround time | 5-10 business days |
| Forms | SBA Form 1919 is required for every loan |
| Collateral |
SBA considers a loan “fully secured” if the lender has taken security interests in all assets being acquired, refinanced, or improved with the 7(a) loan and available fixed assets of the applicant with a combined adjusted net book value up to the loan amount. Other conditions apply – see SOP 50 10 for more details. |
| Credit decision | By SBA or qualified lenders may be granted delegated authority to process, close, service, and liquidate the loan without SBA review. |
7(a) Small
7(a) Small loans are term (non-revolving) 7(a) loans that are $500,000 or less and may be processed under Preferred Lender Program (PLP) delegated authority or non-delegated through the LGPC.
7(a) Small loans exclude: Standard 7(a) loans, SBA Express, Export Express, CAPLines, Export Working Capital Program (EWCP), and Pilot Program loans.
| Maximum loan amount | $500,000 |
| Maximum SBA guarantee % | 85% for loans up to $150,000 and 75% for loans greater than $150,000 |
| Interest rate | Lenders and borrowers negotiate the interest rate, but it may not exceed the SBA maximum |
| SBA turnaround time | 2-10 business days |
| Forms | SBA Form 1919 is required for every loan |
| Collateral |
For loans $50,000 or less: SBA does not require collateral, except for International Trade loans, which have different requirements. For loans $50,001 to $500,000: Lender must follow the written collateral policies and procedures that it has established and implemented for its similarly-sized, non-SBA guaranteed commercial loans; however, a loan is not to be declined solely on the basis of inadequate collateral. |
| Credit decision | By SBA or qualified lenders may be granted delegated authority to process, close, service, and liquidate the loan without SBA review. |
SBA Express
The SBA Express allows certain lenders to generally use their own processes and procedures in exchange for a lower SBA guaranty percentage. SBA Express lenders have delegated authority to process, close, service, and liquidate the 7(a) loan without SBA review.
| Maximum loan amount | $500,000 |
| Maximum SBA guarantee % | 50% |
| Interest rate | Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum |
| Revolving lines of credit | Up to 10 years |
| Forms | Lender primarily uses own forms and procedures, plus SBA Form 1919 |
| Collateral | Lenders are not required to take collateral for loans up to $50,000. May use their existing collateral policy for loans over $50,000 except that a loan is not to be declined solely on the basis of inadequate collateral. |
| Credit decision | Made by the lender |
Export Express
The Export Express Loan Program guarantees smaller dollar revolving lines of credit or term loans to support small business concerns that wish to develop the export side of their business. It offers many of the streamlined features of SBA Express while providing a higher guarantee to mitigate international credit risk.
| Maximum loan amount | $500,000 |
| Maximum SBA guarantee % | 90% for loans of $350,000 or less, 75% for loans more than $350,000 |
| Interest | Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum |
| Revolving lines of credit | May not exceed seven years |
| Forms | Lender primarily uses own forms and procedures, plus SBA Form 1919 |
| Collateral | Lenders are not required to take collateral for loans up to $50,000. May use their existing collateral policy for loans over $50,000 except that a loan is not to be declined solely on the basis of inadequate collateral. |
| Credit decision | Made by the lender |
SBA Senior International Credit Officers can provide in-house training to help lenders become proficient in the Export Express program. For more information on this training or for application assistance, contact your local U.S. Export Assistance Center.
Export Working Capital
7(a) Export Working Capital Program (EWCP) loans are for businesses that can generate export sales and need additional working capital to support these sales. Lenders can receive assistance from the U.S. Export Assistance Center location servicing the exporter's region.
| Maximum loan amount | $5 million |
| Maximum SBA guarantee % | 90% |
| Interest | Lenders and borrowers negotiate the interest rate and there is no SBA maximum interest rate limit. |
| Revolving lines of credit | Terms of 36 months or less |
| Forms | SBA Form 1919 |
| Collateral | In general, the export-related inventory produced and the foreign accounts receivables generated by the export sales financed will be considered to provide adequate collateral coverage. |
| Credit decision | By SBA or qualified lenders may be granted delegated authority to process, close, service, and liquidate the 7(a) loan without SBA review. |
International Trade
Under the 7(a) International Trade loan program, SBA guarantees term loans to improve the competitive position of small business concerns that are existing exporters or are developing new export markets. SBA also guarantees term loans to improve the competitive position of any small business concerns adversely affected by import competition.
Businesses can use International Trade loans to acquire, construct, renovate, modernize, improve, or expand facilities and equipment to be used in the United States to produce goods or services involved in international trade and to develop and penetrate foreign markets, and for working capital for export transactions.
| Maximum loan amount | $5 million |
| Maximum SBA guarantee % | 90% |
| Interest rate | Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum |
| SBA turnaround time | 5-10 business days |
| Credit decision | By SBA or qualified lenders may be granted delegated authority to process, close, service, and liquidate the 7(a) loan without SBA review. |
CAPLines
CAPLines is an umbrella program that helps small businesses meet their short-term and cyclical working-capital needs. See SOP 50 10 for specific details.
- Seasonal CAPLine: finances the seasonal increases of accounts receivable and inventory — or in some cases associated increased labor costs. The loan may be revolving or non-revolving.
- Contract CAPLine: finances the costs of one or more specific contracts, including overhead or general and administrative expenses, allocable to the specific contract(s). The loan may be revolving or non-revolving.
- Builders CAPLine: provides financing to small general contractors to construct or rehabilitate residential or commercial property for resale. This program provides an exception under specified conditions to the general rule against financing investment property. “Construct” and “rehabilitate” mean only work done on-site to the structure, utility connections, and landscaping.
- Working CAPline: provides an asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth, recurring and/or short-term needs. Repayment comes from converting short-term assets into cash, which is remitted to the lender. Businesses continually draw from this line of credit, based on existing assets, and repay as their cash cycle dictates. This line generally is used by businesses that provide credit to other businesses. Because these loans require continual servicing and monitoring of collateral, additional fees may be charged by the lender.
With the exception of the Builders CAPLine, the maximum maturity on a CAPLine loan is 10 years. Builders CAPLine loans must not exceed 60 months plus the estimated time to complete construction or rehabilitation.
