{
  "title": "What is an SBA 7(a) loan? Definition, terms and example",
  "url": "https://acquisitions.com/blog/what-is-an-sba-7a-loan/",
  "author": "Moran Pober",
  "publisher": "Acquisitions.com",
  "published": "2026-10-24",
  "updated": "2026-10-24",
  "section": "Glossary",
  "keyword": "SBA 7(a) loan",
  "short_answer": "An SBA 7(a) loan is a loan made by a bank or other approved lender and partly guaranteed by the U.S. Small Business Administration. It is the most common SBA loan and can be used to buy a business, among other uses, with a maximum loan amount of $5 million and repayment terms of up to 10 years for a business purchase.",
  "facts": {
    "Purchase price": [
      "$1,500,000",
      "3.3x SDE of $450,000"
    ],
    "Buyer's cash": [
      "$150,000",
      "10% of the price"
    ],
    "Seller note": [
      "$150,000",
      "10%, 7% interest, 10 years"
    ],
    "SBA 7(a) loan": [
      "$1,200,000",
      "80%, 10% interest, 10 years"
    ],
    "Yearly payment on the SBA loan": [
      "$190,300",
      "Principal and interest"
    ],
    "Yearly payment on the seller note": [
      "$20,900",
      "Principal and interest"
    ],
    "Total yearly debt payments": [
      "$211,200",
      "Both loans"
    ],
    "SDE less a $100,000 owner salary": [
      "$350,000",
      "Cash available to pay debt"
    ],
    "Debt service coverage ratio": [
      "1.66x",
      "$350,000 ÷ $211,200"
    ]
  },
  "sources": [
    "https://www.sba.gov/funding-programs/loans/7a-loans",
    "https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs",
    "https://www.investopedia.com/terms/d/dscr.asp"
  ],
  "license": "Facts may be quoted with attribution to Acquisitions.com and a link to the url above."
}