QUICK REFERENCE TO SBA LOAN PROGRAMS

 

Program Maximum Guaranteed Percent of Guarantee (Max.) Use of Proceeds Maturity Maximum Interest Rates Guaranty and Other Fees Eligibility
7(a) Loan
guaranty
$750,000 75% (80% if total loan is $100,000 or less) Expansion or renovation; construction of new facility; purchase land or buildings; purchase equipment, fixtures, leasehold improvements, working capital; refinancing debt for compelling reasons; seasonal line of credit; inventory acquisition Depends on ability to repay; generally working capital is 5-10 years; machinery/ equipment, real estate, construction, up to 25 years (not to exceed life of equipment) Negotiable with lender; loans under 7 years, max, prime + 2.25 %; 7 years or more, max.2.75% over prime; under $50,000, rates may be slightly higher Paid by lender (usually passed onto borrower Based on maturity, amount of SBA exposure: 1 year or less, 0.25%; over 1 year, SBA share more than $80,000, figured on incremental scale Must be operated for profit; meet SBA size standards; good character, management expertise and commitment, and always show ability to repay; may not be involved in speculation or investment
CAP Lines
Short-term & RLC's Seasonal Contract Standard Asset-Based Small Asset-Based
$750,000 (except Small Asset-Based) $200,000 (total loan amount) 75%, see 7 (a) Finance Seasonal working capital needs; costs to perform; construction costs; advances against existing inventory & receivable; consolidation of short-term debts possible Up to 5 years on servicing fees 2.25% See 7 (a) Under Standard Asset-Based, no restrictions Existing businesses, see 7 (a)
LowDoc
One-page SBA application to obtain guaranty, quick turnaround after applicant meets lender requirements
$100,000 (total loan amount) 80% Same as 7(a) except may not be used to repay certain types of existing debt See 7 (a) See 7 (a) See 7 (a) Start-ups and businesses with $5 million or less annual sales for past 3 years, employ 100 or fewer; program relies on applicant's character and credit history
FA$TRAK
Lender approves loan, no additional paperwork for SBA; pilot program, limited sites
$100,000 (total loan amount) 50% Same as 7 (a); limitations on real estate and construction; may be used for term loans or revolving credit Term loan same as 7(a); no more than 5 years on revolving line of credit See 7 (a) See 7 (a) See 7 (a)
International Trade Loan Program
Short & long term financing
$1.2 million 75%, see 7(a) Working capital; improvement in US for producing goods or services; may not be used to repay existing debt Up to 25 years See 7 (a) See 7 (a) Small businesses engaged or preparing to engage in international trade or adversely affected by competition from imports; see 7(a) for other qualifications
Export Working Capital Program
1-page application, fast turnaround; may apply for prequalification letter Loan)
$750,000 (may be combined with International Trade) 75%, see 7(a) Short-term working-capital loans to finance export transactions Matches single transaction cycle or generally 1 year line of credit No cap See 7(a); no restrictions on servicing fees Small business exporters who need short-term working capital; see 7 (a) for other qualifications
DELTA
Defense Loan & Technical Assistance Program, provides financial & technical assistance to help defense-dependent firms diversify into commercial market; effort of SBA and DOD
7(a) or combined with 504; $1.25 million (total loan amount) 504:$1 million SBA share (up to 40% of project) Depends on whether done under 7(a) or 504; see both Defense conversion; see 7 (a), 504 see 7 (a), 504 see 7 (a), 504 see 7 (a), 504 Defense-dependent small firms adversely affected by defense cuts; see 7 (a), 504 for qualifications (program authority will expire 9/30/98)
504 Certified Development Company Program
Long-term, fixed-asset loans through nonprofit development companies; must create or retain 1 job per $35,000 of debenture proceeds
Limit on SBA portion of project is $750,000 to $1 million 40% of project (100% SBA-backed debenture); private lender unlimited Purchase of major fixed assets such as land, buildings, improvements, long-term equipment, construction, renovation 10 to 20 years only Based on current market rate for 5 and 10 year Treasury issues, plus an increment above Treasury rate Fees related to debenture, approx. 3% For-profit businesses that do not exceed $6 million in tangible net worth and did not have average net income over $2 million for past 2 years


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