# SBA 7(a) loan

The government-guaranteed loan most small acquisitions run on.

It is the reason an individual can buy a one-to-five-million-dollar business with roughly 10% down: the government guarantee lets a bank lend against [goodwill](https://searchspheresource.com/glossary/goodwill) it could never collateralize alone. Its rules then shape nearly every self-funded deal, from the [equity injection](https://searchspheresource.com/glossary/equity-injection) to [seller-note](https://searchspheresource.com/glossary/seller-note) standby to the [personal guarantee](https://searchspheresource.com/glossary/personal-guarantee), so learning the program is learning the structure.

In numbers: On a $4M service-business acquisition, the 7(a) lends $3.6M over ten years and the buyer injects $400k. The trucks and equipment might appraise at $500k, so the other $3.5M of the price is goodwill; a conventional bank has almost nothing to repossess, which is why it says no and the guaranteed loan says yes.

Source: https://searchspheresource.com/glossary/sba-7a
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt