Small Business Resource

Here is a handy guide to the various SBA loan programs. Click here to review a synopses of SBA Loan Programs.If you are interested in obtaining further information for a specific Loan Program listed below, click on the Loan Program and you will be brought to the SBA Web site.

PROGRAM: 7(a) Loan Guaranty Program (the SBA’s primary loan program).

• Maximum Amount Guaranteed: $750,000 in most cases Percent of Guarantee (Max.): 75% (80% if total loan is $100,000 or less)
• Use of Proceeds: Expansion or renovation; construction of new facility; purchase land or buildings; purchase equipment, fixtures, leasehold improvements; working capital; refinance debt for compelling reasons; seasonal line of credit; inventory acquisition
• Maturity. Depends on ability to repay; generally working capital is up to 7 years; machinery/equipment, real estate, construction, up to 25 years (not to exceed life of equipment) Maximum Interest Rates: 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 Guaranty and Other Fees: Paid by lender (usually passed onto borrower).
• Amount of SBA exposure (based on maturity): 1 year or less — 0.25%
• Over 1 year and SBA share $80,000 or less — 2%;
• Over 1 year and SBA share more than $80,000 — figured on incremental scale
• Eligibility: Must be operated for profit; meet SBA size standards; show good character, management expertise and commitment, and always show ability to repay; may not be involved in speculation or investment

PROGRAM: CAPLines, Short-Term and RLCs; Seasonal, Contract, Builders, Standard Asset-Based, Small Asset-Based

• Maximum Amount Guaranteed: $750,000 (except Small Asset-Based); Small Asset-Based $200,000 (total loan amount)
• Percent of Guarantee (maximum): 75%, see 7(a)
• Use of Proceeds: Finance seasonal working-capital needs; costs to perform; construction costs; advances against existing inventory and receivables; consolidation of short-term debts possible
• Maturity: Up to 5 years
• Maximum Interest Rates: 2.25%
• Guaranty and Other Fees: See 7(a); Under Standard Asset-Based, no restrictions on servicing fees
• Eligibility: Existing businesses, see 7(a)

PROGRAM: International Trade Loan Program, Short- and Long-Term Financing

• Maximum Amount Guaranteed: $1.25 million
• Percent of Guarantee (maximum): 75%, see 7(a)
• Use of Proceeds: Working capital; improvements in U.S. for producing goods or services; may not be used to repay existing debt
• Maturity: Up to 25 years
• Maximum Interest Rates: See 7(a)
• Guaranty and Other Fees: See 7(a)
• Eligibility: Small businesses engaged or preparing to engage in international trade or adversely affected by competition from imports; see 7(a) for other qualifications

PROGRAM: Export Working Capital Program

• Features: 1-page application, fast turnaround; may apply for pre-qualification letter
• Maximum Amount Guaranteed: $750,000 (may be combined with International Trade Loan)
• Percent of Guarantee (maximum): 90%, see 7(a)
• Use of Proceeds: Short-term working-capital loans to finance export transactions
• Maturity: Matches single transaction cycle or generally 1 year for line of credit
• Maximum Interest Rates: No cap
• Guaranty and Other Fees: See 7(a); no restrictions on servicing fees
• Eligibility: Small business exporters who need short-term working capital; see 7(a) for other qualifications

PROGRAM: DELTA, Defense Loan and Technical Assistance Program

• Features: Provides financial and technical assistance to help defense-dependent firms diversify into commercial market; joint effort of SBA and DoD
• Maximum Amount Guaranteed: 7(a) or combined with 504: $1.25 million (total loan amount). 504: $1 million SBA share (up to 40% of project)
• Percent of Guarantee (maximum): Depends on whether done under 7(a) or 504; see both
• Use of Proceeds: Defense conversion; see 7(a), 504
• Maturity: See 7(a), 504
• Maximum Interest Rates: See 7(a), 504
• Guaranty and Other Fees: See 7(a), 504
• Eligibility: Defense-dependent small firms adversely affected by defense cuts; see 7(a), 504 for qualifications (program authority will expire 9/30/98)

PROGRAM: Minority and Women’s Pre-qualification Loan Program

• Features: Help to prepare application and secure loan; SBA pre-qualification letter; pilot programs, limited sites
• Maximum Amount Guaranteed: Minority Pre-qualification Loan Program $250,000 generally (total loan amount); Women’s Pre-qualification Loan Program $250,000 (total loan amount)
• Percent of Guarantee (maximum): 75%, see 7(a)
• Use of Proceeds: See 7(a)
• Maturity: See 7(a)
• Maximum Interest Rates: See 7(a)
• Guaranty and Other Fees: See 7(a); plus minority program may use for-profit intermediaries; women’s program uses nonprofit only; both may charge fees
• Eligibility: Must be at least 51% owned and operated by racial/ethnic minority or women; $5 million or less annual sales for past 3 years; employ 100 or fewer, focus on credit history, ability to repay, probability of success

PROGRAM: LowDoc Loan Program

• Features: One-page SBA application to obtain guaranty, quick turnaround after applicant meets lender requirements
• Maximum Amount Guaranteed: $100,000 (total loan amount)
• Percent of Guarantee (maximum): 80%
• Use of Proceeds: Same as 7(a) except may not be used to repay certain types of existing debt
• Maturity: See 7(a)
• Maximum Interest Rates: See 7(a)
• Guaranty and Other Fees: See 7(a)
• Eligibility: 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

PROGRAM: SBA EXPRESS (FA$TRAK)

• Features: Lender approves loan, no additional paperwork for SBA; pilot program, limited sites
• Maximum Amount Guaranteed: $100,000 (total loan amount)
• Percent of Guarantee (maximum): 50%
• Use of Proceeds: Same as 7(a); limitations on real estate and construction; may be used for term loans or revolving credits
• Maturity: Term loan same as 7(a); no more than 5 years on revolving line of credit
• Maximum Interest Rates: See 7(a)
• Guaranty and Other Fees: See 7(a)
• Eligibility: See 7(a)

PROGRAM: 7(m) MicroLoan Program

• Maximum Amount Guaranteed: $25,000 (total loan amount)
• Percent of Guarantee (maximum): NA
• Use of Proceeds: Purchase equipment, machinery, fixtures, leasehold improvements; finance increased receivables; working capital; may not be used to repay existing debt
• Maturity: Shortest term possible, not to exceed 6 years
• Maximum Interest Rates: Negotiable with intermediary
• Guaranty and Other Fees: No guaranty fee
• Eligibility: Same as 7(a)

The Certified Development Company (504) Loan Program

• Features: Long-term, fixed-asset loans through nonprofit development companies; must create or retain 1 job per $35,000 of debenture proceeds
• Maximum Amount Guaranteed: Limit on SBA portion of project is $750,000 to $1 million
• Percent of Guarantee (maximum): 40% of project (100% SBA-backed debenture); private lender unlimited
• Use of Proceeds: Purchase of major fixed assets such as land, buildings, improvements, long-term equipment, construction, renovation
• Maturity: 10 or 20 years only
• Maximum Interest Rates: Based on current market rate for 5- and 10-year Treasury issues, plus an increment above Treasury rate
• Guaranty and Other Fees: Fees related to debenture, approx. 3%
• Eligibility: 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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