The acronyms and terms of government-guaranteed small-business lending, each with what it actually means. Written for lenders, borrowers, and anyone trying to make sense of a 7(a) file.
| Term | Stands for | What it actually means * |
|---|---|---|
| SBA | Small Business Administration | The federal agency that guarantees small-business loans so banks are willing to make them. |
| 7(a) | Section 7(a) loan program | The SBA's main loan program, named after a section of the law. Loans up to $5 million, guaranteed 75-85% by the government. |
| 7(a) Small | 7(a) Small loan | A 7(a) loan of $350,000 or less, with a streamlined underwriting path. |
| 504 | Section 504 loan program | An SBA program for real estate and major equipment, run through CDCs. |
| CDC | Certified Development Company | A nonprofit that administers SBA 504 loans. |
| SBA Express | A faster 7(a) variant up to $500K with only a 50% guarantee; lenders mostly use their own forms. | |
| SOP 50 10 | Standard Operating Procedure 50 10 | The SBA's rulebook for making loans. The current version is SOP 50 10 8, effective June 2025. A 7(a) file must comply with it or the guarantee is at risk. |
| Term | Stands for | What it actually means * |
|---|---|---|
| LSP | Lender Service Provider | A third party that does a bank's SBA loan paperwork under a written agreement reviewed by the SBA. The bank pays the fee, never the borrower. This is what Operandi is. |
| PLP | Preferred Lenders Program | Delegated authority: the lender approves SBA loans in-house without sending each file to the SBA first. |
| LGPC | Loan Guaranty Processing Center | The SBA center that reviews loan applications from non-delegated lenders. |
| CDFI | Community Development Financial Institution | A mission-driven lender serving underserved communities. |
| CU | Credit Union | A member-owned lender; many participate in SBA lending. |
| NAGGL | National Association of Government Guaranteed Lenders | The trade association of SBA lenders. |
| Term | Stands for | What it actually means * |
|---|---|---|
| Packaging | Assembling the complete, rule-compliant loan file: eligibility, financial analysis, forms, and exhibits. What lenders pay $2,000-4,000 per file for today. | |
| Spreading | Financial spreading | Extracting the numbers from tax returns and financial statements into a standardized analysis of the business. |
| DSCR | Debt Service Coverage Ratio | Whether the business earns enough to cover its loan payments. Cash flow divided by debt payments; lenders generally want at least 1.15x. |
| Credit elsewhere | The required test that the borrower cannot get reasonable credit without the guarantee; the lender must document why. | |
| Equity injection | The borrower's own money in the deal. Startups and business purchases need at least 10% down under current rules. | |
| Standby agreement | A creditor's promise not to collect. A seller's note only counts toward equity injection if it is on full standby for the whole loan term. | |
| Form 1919 | SBA Form 1919 | The borrower information form: ownership, history, and eligibility questions. |
| Form 413 | SBA Form 413 | The personal financial statement each 20%+ owner provides. Must be current. |
| Form 159 | SBA Form 159 | The fee disclosure form for agents and packagers paid in connection with a loan. |
| 4506-C | IRS Form 4506-C | The borrower's authorization for the lender to pull IRS transcripts and verify tax returns are real. |
| SBSS | Small Business Scoring Service | The SBA's old small-loan credit score. Retired March 1, 2026 for 7(a) Small loans; lenders now document their own credit analysis. |
| E-Tran | The SBA's electronic system where loans are submitted and receive their loan numbers. |
| Term | Stands for | What it actually means * |
|---|---|---|
| Guaranty purchase | When a loan defaults and the lender asks the SBA to pay the guaranteed share. The SBA audits the file before paying. | |
| Repair / denial | The SBA reducing (repair) or refusing (denial) the guarantee payout because the file broke the rules. The outcome packaging exists to prevent. | |
| Secondary market | Lenders can sell the guaranteed portion of a 7(a) loan at a premium for immediate income. | |
| 1502 report | The monthly status report lenders file on their SBA loan portfolio. | |
| SOP 50 57 | The SBA's rulebook for servicing and liquidating loans after they close. |