For SBA lenders
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.
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.
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.
Insider move
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.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA Table of Size Standards
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on eligibility determinations
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