SBA guarantees three types of 7(a) business loans known as Advantage Loans. These are the Small/Rural Lender Advantage Loan, the Community Advantage Loan and the Small Loan Advantage. 

The loan provided to the business is the equivalent of a Basic 7(a) Loan—not revolving—allowing the proceeds to be used for regular purposes. What differentiates a Basic 7(a) Advantage Loan from a Basic 7(a) loan is which lenders can get a guarantee. Another difference is the amount of underwriting some lenders must conduct before providing a guarantee. The principal difference is tied to the lender who provides the loan, rather than the structure and purpose of the loan. The Advantage Programs allows selected lenders to obtain 7(a) guarantees on loans they propose to provide to eligible and creditworthy small businesses that meet all the requirements of a Basic 7(a) Loan through an alternative application process.

All the Special Purpose Loan Programs listed above have certain requirements (such as what collateral must be obtained and how the repayment structure of principal and interest) that the SBA imposes on the lender and/or that the lender must impose on the borrower.

These programs also impose certain requirements on the lender for underwriting and closing the loan.

For more information, please review the Community Advantage Participant Guide.