SBA loan basics
Short answer
The typical maximum repayment term for an SBA 7(a) loan used to purchase equipment is 10 years, or the useful life of the equipment, whichever is shorter.
SBA policy dictates that the loan term for equipment financing should not exceed the useful life of the assets being purchased, up to a maximum of 10 years. This ensures that the loan is repaid before the collateral significantly depreciates or becomes obsolete. Lenders will assess the type of equipment and its expected lifespan to determine the appropriate term.
A construction company uses an SBA 7(a) loan to buy a new bulldozer, which has an estimated useful life of 7 years. The loan term for this equipment would be set at 7 years. If they bought general office equipment with a useful life of 5 years, the term would be 5 years, even though 10 years is the maximum for equipment.
Insider move
Lenders must align the loan term with the useful life of the equipment to protect their collateral position. They will require detailed descriptions of the equipment and may need to consult industry standards or appraisals to confirm useful life.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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.
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