The 30-second answer
The 90% SBA Grocery guarantee protects the participating lender—not the grocery store borrower.
It does not mean:
- The government pays 90% of your loan.
- You automatically qualify with 10% down.
- The loan is a grant.
- Approval is guaranteed.
The borrower must still repay 100% of the loan, plus interest and applicable fees.
The advantage is that the SBA guaranty reduces part of the lender’s risk. That may give participating lenders greater confidence to finance eligible grocery stores and supermarkets.
At a glance
Eligible grocery businesses may be able to obtain:
- Up to $5 million in total financing
- An SBA guaranty of up to 90% to the lender
- Up to $2 million in working capital
- Financing for facilities, renovations, equipment and eligible debt refinancing
Approval remains subject to SBA eligibility requirements and the participating lender’s underwriting. (*)
A simple $2 million example
Suppose a grocery store receives a $2 million loan under the program.
| Loan component | Amount |
| Total loan | $2,000,000 |
| Potential SBA-guaranteed portion | $1,800,000 |
| Lender’s unguaranteed portion | $200,000 |
| Amount owed by the borrower | $2,000,000, plus interest and fees |
The SBA guaranty may cover up to $1.8 million of the lender’s exposure. It does not reduce the grocery store’s loan balance to $200,000.
The business remains responsible for the entire debt.
Why does the 90% guaranty matter?
Lenders evaluate grocery businesses based on factors such as profitability, cash flow, existing debt, management experience, credit history, project cost and available collateral.
The 90% guaranty does not replace that review. It reduces the lender’s exposure if the borrower defaults and the loan was handled according to SBA requirements.
According to the SBA, its loan guaranties can help lenders offer longer terms and work with qualified businesses they might not otherwise finance. (*)
For an established grocery operator, that could make the program useful for a larger expansion, modernization or working-capital project.
What the 90% guaranty does not mean
It does not mean only 10% down
The guaranty percentage and the borrower’s equity contribution are two different things.
A lender can receive a 90% SBA guaranty and still require the borrower to contribute cash to the project. The required contribution will depend on the transaction, business performance, use of funds and lender underwriting.
Do not assume that “90% guaranty” means “90% financing.”
It does not guarantee approval
A grocery store must still qualify.
General 7(a) eligibility requirements include operating for profit in the United States, meeting SBA size requirements, being creditworthy and demonstrating a reasonable ability to repay the loan. Applicants must also satisfy the applicable requirement concerning the availability of credit from non-government sources. (*)
The participating lender—not the SBA announcement—makes the credit decision.
It is not a grant
This is a business loan. The proceeds must be used for approved business purposes, and the borrower must repay the loan according to the loan documents.
It does not remove normal underwriting requirements
The lender may still review:
- Business and personal credit
- Historical profitability
- Current cash flow
- Existing business debt
- Owner equity
- Collateral
- Management experience
- The proposed use of funds
The exact requirements will vary by lender and transaction.
Which grocery businesses are included?
The expanded International Trade Loan policy specifically includes:
NAICS 445110—Supermarkets and Other Grocery Retailers
This may include properly classified independent supermarkets, neighborhood grocery stores, specialty markets, ethnic grocery stores and regional grocery operators.
The business must still meet the applicable SBA size, eligibility and credit requirements. A business that sells food is not automatically classified as a supermarket or grocery retailer. Its primary business activity and revenue sources must support the correct NAICS classification.
Gasoline stations are specifically excluded from International Trade Loan eligibility under the policy notice, although another SBA loan program may potentially be available. (*)
What can the financing be used for?
The program may be used for several significant grocery-store projects.
Facilities and renovations
Eligible proceeds may be used to acquire, construct, renovate, modernize, improve or expand qualifying facilities used in the United States.
For a grocery operator, that could potentially include:
- Expanding the sales floor
- Renovating an existing store
- Adding a prepared-food section
- Improving loading or storage areas
- Modernizing electrical or HVAC systems
- Building or improving cold-storage space
Equipment
Eligible equipment projects could potentially include:
- Refrigerated display cases
- Walk-in coolers and freezers
- Food-preparation equipment
- Shelving and store fixtures
- Point-of-sale systems
- Warehouse equipment
- Backup power systems
Each expense must be reviewed and approved as part of the loan request.
Working capital
An International Trade Loan may include up to $2 million in working capital.
Working capital may help support the operating needs connected with an expansion or modernization project. The lender will determine the acceptable amount and approved uses based on the business’s financial needs and ability to repay.
Eligible debt refinancing
Qualifying business debt may also be refinanced under the International Trade Loan program.
Not every debt will qualify. The lender will typically review the original purpose of the debt, current loan terms, payment history, collateral and the benefit of the proposed refinancing.
Grocery stores receive a simplified trade-eligibility process
International Trade Loans have traditionally required borrowers to show that they are expanding export markets or have been adversely affected by import competition.
Under the Grocery Guarantee policy, businesses within the designated food-supply-chain categories—including NAICS 445110—do not have to provide additional documentation showing that their individual business was harmed by import competition.
The lender must still document how the proposed financing will have a positive effect on the business and improve its competitive position.
For a grocery store, that improvement might come from:
- Reducing refrigeration and energy costs
- Increasing inventory capacity
- Improving product availability
- Expanding selling space
- Adding a new department
- Reducing spoilage
- Improving distribution efficiency
- Opening an additional location
The loan request should clearly explain the business benefit—not just list what the owner wants to purchase.
What will a lender want to see?
The precise document requirements vary, but a grocery operator should generally be prepared to provide:
- Recent business tax returns
- Current profit-and-loss statement
- Current balance sheet
- Business debt schedule
- Detailed use-of-funds breakdown
- Equipment or contractor quotations
- Information about the owners
- Personal financial statements from required guarantors
- A description of how the project will strengthen the business
The lender will use this information to determine whether the proposed loan is affordable and whether the business is likely to repay it.
Four questions to answer before applying
Before approaching a lender, the grocery store owner should be able to answer:
- How much money is needed?
- Exactly how will the money be used?
- How will the project improve the store?
- Can the store’s cash flow support the new payment?
A clear answer to these questions can make the financing request easier for a lender to understand and evaluate.
The bottom line
The SBA Grocery Guarantee’s 90% guaranty is protection for the participating lender.
It is not a 90% government payment, a 10% down-payment promise or guaranteed approval.
For an eligible and financially qualified grocery business, however, the enhanced guaranty may support financing for:
- Store renovations
- Facility expansion
- Refrigeration and equipment
- Working capital
- Eligible debt refinancing
The business must still demonstrate adequate cash flow, proper eligibility and a reasonable ability to repay the entire loan.
Planning a grocery store project?
Request a preliminary review to determine whether your grocery store appears to fit the SBA Grocery Guarantee or whether another SBA financing program may be more appropriate.
[Check Your Grocery Store’s Eligibility]
Loans are made by participating lenders, not directly by the SBA. The SBA guaranty is provided to the lender and does not guarantee borrower approval. Loan amount, interest rate, repayment term, collateral, equity contribution and eligibility are subject to lender underwriting and
