SBA 7(a) Asset Class

SBA 7(a) Loan Program

The SBA 7(a) loan program encourages lenders to make loans to small businesses that the lenders would not have made without some form of credit enhancement.

The SBA 7(a) program serves as the SBA’s primary business loan program to help qualified small businesses obtain financing when they would not be eligible for financing through conventional lending channels

Loan proceeds can be used for most sound business purposes including working capital, machinery and equipment, furniture and fixtures, land & building and leasehold improvements.

The SBA allows lenders to sell the guaranteed portion of SBA 7(a) Loans to investors on the secondary market

Loan maturities range from 5 to 25 years and are fully amortizing:

  • 5 – 7 years for working capital
  • 10 years for equipment
  • 25 years for commercial real estate

Loans are typically indexed to the Prime Rate and carry interest rates between 0.25% – 2.75% over the index

  • Vast majority of SBA 7(a) loans adjust monthly or quarterly
  • Other structures include hybrid adjusts and fixed rates

Loan Profiles

The loans profiled on this website are current or former holdings of the SBA Loan Fund. The loans highlighted may not be the highest performing loans in the Fund, but a sampling of small business loans with an impact story. The loans mentioned do not necessarily represent all of the loans held in the Fund and investor should not assume that the loans identified and profiled were or will be profitable. A complete list of holdings for the Fund can be provided by contacting Solomon Hess Capital Management.

The Solomon Hess SBA Loan Fund LLC attempts to provide its investors with CRA credit related to their participation in the Fund. Investment decisions are not always exclusively based on the economic characteristics or investment merit of a specific asset. Certain CRA eligible securities sought by the Fund in specific geographies may not provide as great an economic benefit to the Fund as the same securities located in non-CRA geographies. The Fund may engage in transactions at times for reasons related to CRA considerations that may not be desirable from an investment standpoint. If one or multiple federal banking regulators, such as the OCC, FDIC or the Federal Reserve Board, were to deem an investment in the Fund as not qualifying for CRA credit, the impact to Fund investors could be material.