{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-is-the-policy-for-a-7-a-loan-when-the-borrower-is-a-small-agricultural-cooperative","api_url":"https://dealroom.so/api/public/questions/what-is-the-policy-for-a-7-a-loan-when-the-borrower-is-a-small-agricultural-cooperative","question":"What is the policy for a 7(a) loan when the borrower is a small agricultural cooperative?","topic":"Eligibility determinations","audience":"lender","bot_mode":"lender","short_answer":"Agricultural cooperatives meeting the SBA's definition of 'small' and operating for profit are generally eligible for 7(a) loans, provided they meet all other program requirements.","rule":"The SBA recognizes that some cooperative structures can be eligible. Agricultural cooperatives, specifically, can qualify for 7(a) loans if they are deemed 'small' under the relevant NAICS code size standard and operate on a for-profit basis for the benefit of their members. Cooperatives that are purely non-profit or primarily consumer/marketing cooperatives may face different eligibility criteria or be ineligible.","example":"A cooperative of small organic farmers applies for a 7(a) loan to purchase shared processing equipment. The lender confirms the cooperative is structured as a for-profit entity, meets the size standards for agriculture, and benefits its member farmers directly. The loan would be eligible.","what_lenders_check":"Lenders must thoroughly review the cooperative's legal structure, operating agreements, and tax status to ensure it aligns with SBA's for-profit and small business definitions. Understanding how profits are distributed and how control is exercised is also important.","required_facts":["Cooperative type (agricultural)","For-profit status","SBA size standard","Membership structure","Eligibility for non-profits"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","SBA Table of Size Standards"],"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 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"title":"SBA Table of Size Standards","url":"https://www.sba.gov/document/support-table-size-standards"}],"related_questions":[{"question":"Can a trust or an estate be an eligible borrower for an SBA 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-trust-or-an-estate-be-an-eligible-borrower-for-an-sba-7-a-loan"},{"question":"What constitutes \"passive income\" disqualifying a business from 7(a) loan eligibility?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-passive-income-disqualifying-a-business-from-7-a-loan-eligibility"},{"question":"Are businesses that primarily derive revenue from real estate rentals eligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/are-businesses-that-primarily-derive-revenue-from-real-estate-rentals-eligible-for-a-7-a-l"},{"question":"Can a business primarily engaged in lending or investment be eligible for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/can-a-business-primarily-engaged-in-lending-or-investment-be-eligible-for-a-7-a-loan"},{"question":"What impact does a principal's recent federal tax lien have on 7(a) loan eligibility, even if paid?","url":"https://dealroom.so/for-lenders/questions/what-impact-does-a-principal-s-recent-federal-tax-lien-have-on-7-a-loan-eligibility-even-i"},{"question":"How does the SBA define 'passive business' making it ineligible for a 7(a) loan, and what specific activities might trigger this?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-define-passive-business-making-it-ineligible-for-a-7-a-loan-and-what-spec"}],"related_terms":[{"term":"7(a) Small Loan","url":"https://dealroom.so/glossary/7-a-small-loan"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"},{"term":"Standard 7(a) loan","url":"https://dealroom.so/glossary/standard-7-a-loan"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"Variable-rate 7(a) loan","url":"https://dealroom.so/glossary/variable-rate-7-a-loan"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"}],"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-policy-for-a-7-a-loan-when-the-borrower-is-a-small-agricultural-cooperative","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."]}