What percent of an SBA 7(a) loan does SBA guarantee?

What the section says

Section 120.210 is four sentences. SBA's guarantee percentage must not exceed the percentage established in section 7(a) of the Small Business Act. The maximum depends on the loan amount. Loans of $150,000 or less may receive up to 85 percent. Loans over $150,000 may receive up to 75 percent, except as otherwise authorized by law. That is the entire rule, so the useful work is in reading it carefully.

Note the verb "may." The regulation sets ceilings. A given loan can carry a lower guarantee percentage if the lender requests one or if another SBA program rule caps it. The ceiling is the number most borrowers want, because it describes how much of the lender's risk SBA absorbs.

Whole loan, not slices

The cleanest reading of the text is that the percentage attaches to the loan, chosen by the loan amount. It does not describe a sliding scale where the first $150,000 gets 85 percent and the excess gets 75 percent. A $200,000 loan therefore has a ceiling of 75 percent of $200,000, which is $150,000, not a blended figure. Run the numbers above with $150,000 and then $150,001 to see the cliff: at $150,000 the maximum guaranteed portion is $127,500, and at $150,001 it is $112,500.75. The larger loan has a smaller maximum guaranteed dollar amount.

That cliff is worth knowing about when you are choosing a loan size. It does not mean a bigger loan is worse for you. The guarantee never reduces what you owe; it only changes how much of the lender's exposure SBA covers if the loan defaults. If the guarantee percentage on your loan matters to you, ask your lender what it is requesting.

Worked examples

A $100,000 loan: 85 percent, so the maximum SBA guaranteed portion is $85,000, and the lender carries $15,000. A $150,000 loan: still 85 percent, maximum guaranteed $127,500, lender carries $22,500. A $500,000 loan: 75 percent, maximum guaranteed $375,000, lender carries $125,000. A $5,000,000 loan, the single-loan ceiling in 120.151: 75 percent, maximum guaranteed $3,750,000, lender carries $1,250,000. That last figure matches the $3,750,000 aggregate guaranty limit in the same part, which is no coincidence: it is 75 percent of $5 million.

Who is protected, and who still owes what

The guarantee runs to the lender. If a borrower defaults and the lender follows SBA's requirements, SBA can purchase the guaranteed portion, as 120.520 describes. Nothing in 120.210 reduces the borrower's debt: the section only caps SBA's share of the lender's risk, and the loan is still the borrower's obligation to repay. For what happens at purchase, see our page on SBA loan default. Our guaranty fee calculator covers the separate question of what the guarantee costs.

Why "except as otherwise authorized by law" matters

The final clause admits that Congress can set different percentages by statute. This section does not list any such authorizations, and this page does not assert any. If someone quotes you a guarantee percentage other than 85 or 75, ask which statute or program rule authorizes it. The default structure printed in 120.210 is the one to expect for a standard 7(a) loan.

What this rule does not tell you

It does not say what interest rate you will pay, what fee is charged, or whether a lender will approve you. It does not say who decides the loan amount boundary when a loan is increased later or made in parts. It does not address the guarantee on a secondary-market sale of the guaranteed portion. And it does not say the lender must request the maximum. Use the calculator for the arithmetic, then ask your lender what percentage it is requesting on your loan.

How to use this when comparing offers

If a lender quotes you a loan size, compare it to the $150,000 line before you compare anything else. A request for $148,000 and a request for $152,000 are nearly the same to you as a borrower, yet the maximum guarantee on the first is $125,800 and on the second is $114,000 under the percentages in 120.210. A lender weighing the loan may care about that difference in its own exposure. You can ask whether trimming or increasing the amount changes what the lender is willing to do, and you can ask what percentage it plans to request. The regulation sets the ceiling; the request, the approval and the pricing are separate steps.

Also read the phrase "determined by the loan amount" as the section means it. The loan amount here is the amount of the loan being guaranteed. This page cannot tell you how SBA treats a loan that is later increased, split, or paired with another financing, because 120.210 says nothing about those cases. Those are questions for your lender.

Sources

• 13 CFR § 120.210, What percentage of a loan may SBA guarantee?. Read November 2, 2026.
• 13 CFR § 120.151, What is the statutory limit for total loans to a Borrower?. Read November 2, 2026.
• 13 CFR § 120.520, Purchase of 7(a) loan guarantees. Read November 2, 2026.

Text read: Electronic Code of Federal Regulations, Title 13, Part 120, current through the eCFR issue date of October 29, 2026. Dollar figures and percentages on this page are the ones printed in those sections as of that date; SBA can amend the rule and publishes loan-program procedures (such as SOP 50 10) that add detail this page does not cover. Confirm current terms with an SBA-approved lender or at sba.gov. This page summarizes the regulation and does not replace it.