California SBA 7(a) Loans
Up to $5M | 10% Down | 25-Year Terms

The SBA 7(a) loan is the most common SBA loan program, offering up to $5 million for various business purposes including real estate, equipment, working capital, and business acquisition. The SBA guarantees a portion of the loan (up to 85%), which reduces lender risk and allows for better terms like lower down payments and longer repayment periods. The loan is made by SBA-approved lenders (banks, credit unions) with SBA backing.

SBA 7(a) loans are flexible and can be used for: purchasing owner-occupied commercial real estate, buying equipment and machinery, financing business acquisition, providing working capital, refinancing existing business debt, and funding leasehold improvements. The key requirement is that funds must be used for legitimate business purposes.

Key requirements include: for-profit US business, meet SBA size standards for your industry, owners with 20%+ stake must personally guarantee, good credit history (typically 680+), demonstrated ability to repay, and sufficient collateral (though not always required). The business must have exhausted other financing options - SBA loans are meant to fill gaps in conventional lending.

SBA 7(a) loans for real estate typically require 10% down payment, sometimes 15-20% depending on the property type and borrower strength. For business acquisitions, 10-20% is common. Working capital loans may require no down payment but may need collateral. The lower down payment is a major advantage over conventional commercial loans which often require 25-30% down.

SBA 7(a) loan rates are variable, based on the Prime Rate plus a spread. For loans over $50,000: Prime + 2.25% for maturities up to 7 years, Prime + 2.75% for maturities over 7 years. As of 2026, with Prime at 8.5% (rates subject to change), SBA 7(a) rates are approximately 10.75% - 11.25%. Some lenders offer fixed-rate options at slightly higher rates.

SBA 7(a) loans typically take 60-90 days to close, longer than conventional commercial loans due to SBA documentation requirements and approval process. Using an SBA-approved lender in our network (PLP) can speed up the process as they can approve loans without individual SBA review. Complex deals or those requiring additional SBA review may take longer.

SBA 7(a) is more flexible - it can be used for real estate, equipment, working capital, and acquisitions. SBA 504 is specifically for real estate and major equipment, offers lower down payment (10%) and below-market fixed rates on the CDC portion. Choose 7(a) for flexibility or working capital needs; choose 504 for the lowest cost real estate financing when you can wait longer to close.

No, SBA loans require owner-occupancy for real estate - you must occupy at least 51% of the property for existing buildings or 60% for new construction. The remaining space can be leased to tenants. For pure investment properties without owner-occupancy, consider DSCR loans, conventional commercial loans, or hard money financing.