{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-net-worth-requirement-for-a-business-to-qualify-as-small-for-a-7-a-loa","api_url":"https://dealroom.so/api/public/questions/what-is-the-maximum-net-worth-requirement-for-a-business-to-qualify-as-small-for-a-7-a-loa","question":"What is the maximum net worth requirement for a business to qualify as \"small\" for a 7(a) loan?","topic":"Eligibility & Size","audience":"lender","bot_mode":"lender","short_answer":"Beyond industry-specific size standards, a business must generally have a tangible net worth not exceeding $15 million and an average net income after federal taxes not exceeding $5 million for the preceding two years.","rule":"For a business to be considered 'small' and eligible for SBA financial assistance, it must meet both the industry-specific size standard (based on NAICS code, usually revenue or employees) AND a secondary test. This secondary test requires the business to have a tangible net worth of $15 million or less, and an average net income after federal income taxes (excluding carry-over losses) of $5 million or less for the two full fiscal years before the application date.","example":"A manufacturing company with $20 million in annual revenue (within its NAICS code limit) applies for a 7(a) loan. However, its tangible net worth is $18 million and its average net income for the last two years was $6 million. The lender must decline the application as the business exceeds the alternative size standard.","what_lenders_check":"Lenders must perform a comprehensive size determination, considering both the primary NAICS code standard and the alternative tangible net worth and net income tests. Incorrect size determination can jeopardize the SBA guaranty. Verification requires reviewing financial statements and tax returns.","required_facts":["Tangible net worth","Net income after tax","Two fiscal years","Size standard","NAICS code"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 121 - Small Business Size Regulations","SBA Table of Size Standards","7(a) Loan Program Terms, Conditions, and Eligibility"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 121 - Small Business Size Regulations","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-121"},{"title":"SBA Table of Size Standards","url":"https://www.sba.gov/document/support-table-size-standards"},{"title":"7(a) Loan Program Terms, Conditions, and Eligibility","url":"https://www.sba.gov/partners/lenders/7a-loan-program/terms-conditions-eligibility"}],"related_questions":[{"question":"What are the basic eligibility requirements for a business to get an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-basic-eligibility-requirements-for-a-business-to-get-an-sba-7-a-loan"},{"question":"How does the SBA determine if my business is considered 'small' for eligibility?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-determine-if-my-business-is-considered-small-for-eligibility"},{"question":"How does a lender determine a business's size standard eligibility for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-determine-a-business-s-size-standard-eligibility-for-a-7-a-loan"},{"question":"How does the SBA define a 'small business' for loan eligibility?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-a-small-business-for-loan-eligibility"},{"question":"What does 'small business' mean for SBA 7(a) loan eligibility purposes?","url":"https://dealroom.so/for-lenders/questions/what-does-small-business-mean-for-sba-7-a-loan-eligibility-purposes"},{"question":"Does my business need to have a certain number of employees to qualify for an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/does-my-business-need-to-have-a-certain-number-of-employees-to-qualify-for-an-sba-7-a-loan"}],"related_terms":[{"term":"Net Worth","url":"https://dealroom.so/glossary/net-worth"},{"term":"Small Business Administration","url":"https://dealroom.so/glossary/small-business-administration"},{"term":"For-profit small business","url":"https://dealroom.so/glossary/for-profit-small-business"},{"term":"Negative Net Worth","url":"https://dealroom.so/glossary/negative-net-worth"},{"term":"Tangible net worth","url":"https://dealroom.so/glossary/tangible-net-worth"},{"term":"Personal Net Worth","url":"https://dealroom.so/glossary/personal-net-worth"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/what-is-the-maximum-net-worth-requirement-for-a-business-to-qualify-as-small-for-a-7-a-loa","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}