The SBA 7(a) loan has the following requirements:

• Your business must operate for profit. Nonprofits and not-for-profit businesses are not eligible.
• You must also have some equity in the business — this could mean you already have a profitable business, or you could use your own personal equity as collateral.
• If you have any alternative financial resources, you must have used them first. For example, if you have a personal savings account or are able to get a personal loan, then you must first pursue those options before applying for an SBA 7(a) loan.
• The business owner cannot be on parole.
• You must be doing business in the U.S. or its territories.
• A maximum loan amount of $5 million with no minimum loan amount (most loans, however, are $30,000 or more).
• The business must meet the SBA's size standards for its particular industry.
• The business must have fewer than 500 employees and less than $7.5 million in revenue each year for the previous three years.
• The business must physically be based in the U.S. and operate within the U.S. and its territories.
• Business owners must first have used other sources of financing, including personal funds, in order to qualify.
• Businesses must not be involved in lending, real estate, or speculation.

The advantages of an SBA 7(a) loan include:

• Highly competitive, low interest rates
• Long loan terms, up to 25 years
• Fixed and variable-rate options are available
• A variety of businesses are eligible
• Low down payments, typically around 10-20%
• Variety of loan options, including SBA 7(a) express loans, SBA 7(a) CAPLines
• Most SBA loans, including 7(a) loans are fully amortizing, meaning borrowers don’t have to worry about balloon payments

Flexibility in underwriting, often has lower interest rates than other comparable financing options, and flexible collateral requirements are also advantages of an SBA 7(a) loan.

SBA 7(a) loan disadvantages include:

• Lengthy approval times (for standard SBA 7(a) loans)
• Lots of documentation
• Collateral is often required
• Certain businesses, including real estate investing, lending, gambling, and speculation are prohibited
• High credit scores are typically required (typically 680+)
• May be restrictions on supplemental/additional financing

Source: www.sba7a.loans/sba-7a-loans-small-business-blog/pros-and-cons

Source: www.commercialrealestate.loans/blog/difference-between-sba-7a-and-sba-504-in-cre

The best states for getting an SBA 7(a) loan are Utah, Vermont, New Hampshire, Rhode Island, Idaho, Montana, Massachusetts, Minnesota, North Dakota, and Wisconsin. These states have an approval rate of more than one loan per 10,000 residents per year.

Unfortunately, if you live in Tennessee, South Carolina or West Virginia, it’s going to be tougher to get an approval. These states have an approval rate of less than one per 10,000 residents per year. It’s not impossible to get an SBA 7(a) loan in these states, but you’d better bring your A-game. Have your business plan ready, make sure you have enough of your own money to bring to the table and know exactly what you’re going to spend the proceeds on.

If you’re looking to relocate, this could be valuable information. Ultimately, the best place for you to apply for your SBA 7(a) loan is where your market is. After all, without a convincing business plan and a solid strategy, you’ll have a hard time winning over a loan officer in any state.

The worst states for getting an SBA 7(a) loan are Tennessee, South Carolina, West Virginia, Alabama, Louisiana, Virginia, Arkansas, North Carolina, Kentucky, Florida, Oklahoma, and Maryland. According to this source, these states have an approval rate of less than one per 10,000 residents per year.