Loan Programs

SBA 7(a) Loan Program

 

The SBA 7(a) loan program is the SBA’s most-used loan program and a key tool for community lenders. The SBA 7(a) is loan guarantee program, meaning a bank loans the funds to qualified applicants and the SBA guarantees a large portion of a loan, mitigating much of the risk for lenders, and providing small business borrowers with access to needed capital.

 

Key features of the 7(a) loan program include:

 

  • Loans of up to $5 million can be made, with no minimum loan amount.

  • The SBA can guarantee as much as 85 percent on loans of up to $150,000 and 75 percent on loans of more than $150,000.

  • Interest rates are set by the lender, but can’t exceed SBA maximums.

  • Extended terms on most 7(a) loans can ensure stronger borrower cash flow and increased ability to service debt.

 

For more information, visit SBA General Small Business Loans: 7(a)

 

SBA CDC/504 Loan Program

 

The CDC/504 Loan Program provides financing for major fixed assets such as equipment or real estate. The 504 program differs from the 7(a) program in that it is a loan participation program, with the SBA providing part of the loan funds. A key characteristic of the program is long-term, fixed rate financing for the SBA portion of the loan. Proceeds can be used for:

 

  • The purchase of land, including existing buildings

  • The purchase of improvements, including grading, street improvements, utilities, parking lots and landscaping

  • The construction of new facilities or modernizing, renovating or converting existing facilities

  • The purchase of long-term machinery and equipment

 

For more information, visit SBA Real Estate and Equipment Loans: CDC/504

 

SBA CAPLines

 

CAPLines is an umbrella program that helps small businesses meet their short-term and cyclical working-capital needs. It features four lines:

 

  • Seasonal Line. Borrowers must use the loan proceeds solely to finance the seasonal increases of accounts receivable and inventory (or in some cases associated increased labor costs); it can be revolving or non-revolving.

 

  • Contract Line. This line finances the direct labor and material cost associated with performing assignable contract(s); it can be revolving or non-revolving.

 

  • Builders Line. Small general contractors or builders constructing or renovating commercial or residential buildings can finance direct labor and material costs. The building project serves as the collateral, and loans can be revolving or non-revolving.

 

  • Asset-Based Line. This is an asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth, recurring and/or short-term needs. Repayment comes from converting short-term assets into cash, which is remitted to the lender. Businesses continually draw from this line of credit, based on existing assets, and repay as their cash cycle dictates. This line generally is used by businesses that provide credit to other businesses. Because these loans require continual servicing and monitoring of collateral, additional fees may be charged by the lender.

 

For more information, visit SBA CAPLines

 

SBA Export Loans

 

The SBA has several programs available to help small businesses that want to develop or expand trade and export activities. Ninety-seven percent of all exporters are small businesses!

 

  • SBA Export Express offers financing up to $500,000. It is the simplest export loan product offered by the SBA and allows participating lenders to use their own forms and procedures. The SBA determines eligibility and provides a loan approval in 36 hours or less.

 

  • The Export Working Capital Loan provides advances for up to $5 million to fund export transactions from purchase order to collections. This loan has a low guarantee fee and quick processing time.

 

  • SBA’s International Trade Loan Program provides small businesses with enhanced export financing options for their export transactions. The ITL is designed to help small businesses enter and expand into international markets and, when adversely affected by import competition, make the investments necessary to better compete. The ITL offers a combination of fixed asset, working capital financing and debt refinancing with the SBA’s maximum guaranty — 90 percent — on the total loan amount.

 

For more information visit SBA Export Loan Programs.

 

USDA Business & Industry (B&I) Loan Program

 

A borrower located in a rural community may qualify for special financing through the U.S. Department of Agriculture (USDA).  The Business and Industry (B&I) Guaranteed Loan Program provides guarantees of up to 80 percent of a loan made by a commercial lender. Proceeds for B&I Loan can be used for:

 

  • Working capital

  • Machinery and equipment

  • Buildings and real estate

  • Certain types of debt refinancing.

 

For more information, visit USDA Business & Industry Loans.

 
USDA Community Facilities Program
 

Essential community infrastructure is key in ensuring that rural areas enjoy the same basic quality of life and services enjoyed by those in urban areas. Community Facilities Programs offer direct loans, loan guarantees and grants to develop or improve essential public services and facilities in communities across rural America. These amenities help increase the competitiveness of rural communities in attracting and retaining businesses that provide employment and services for their residents.

 

For more information, visit USDA Community Facilities Programs