Small Business Administration Loans.

Small Business Administration has 6 types of Loans available for your small business.
The 6 types of SBA loans are
7a loans
CDC/504 loans
CAPLines
Export loans
Microloans
Disaster loans.


Small Business Administration Quick Overview Chart
Of Loan Guaranty Programs.
This is an overview and does not include full policy and procedures.
See SOP 50 10 5(B) Lender and Development Company Loan Programs  for more details.

SBA Loan Program
February 2017 Version B
Maximum Loan Amount Percent of Guaranty Use of Proceeds Maturity Maximum
Interest Rates
Guaranty Fees Who Qualifies Benefits to Borrowers

7a loans

(Most popular) For Small businesses that need working capital up to $5 million.
$5 million 85% guaranty for loans of $150,000 or less; 75% guaranty for loans greater than $150,000 (up to $3.75 million maximum guaranty) Term Loan. Expansion/ renovation; new construction, purchase land or buildings; purchase equipment, fixtures, lease-hold improvements; working capital; refinance debt for compelling reasons; seasonal line of credit, inventory or starting a business Depends on ability to repay. Generally, working capital & machinery & equipment (not to exceed life of equipment) is 5-10 years; real estate is 25 years. Loans less than 7 years: $0 - $25,000 Prime + 4.25%
$25,001 - $50,000 P + 3.25%
Over $50,000 Prime + 2.25% Loans

7 years or longer:
0 - $25,000 Prime + 4.75%
$25,001 - $50,000 P + 3.75%
Over $50,000 Prime + 2.75%

((No SBA guaranty fees on loans of $150,000 or less approved in FY 2017.)
Fee charged on guarantied portion of loan only.
 $150,001-$700,000 = 3.0%;

$700,001- $1,000,000 = 3.5%; plus 3.75% on guaranty portion over $1 million,

12 months or less .25% Ongoing fee of 0.546%.
Must be a for-profit business & meet SBA size standards;

Show good character, credit, management, and ability to repay.
 
Must be an eligible type of business.

Prepayment penalty for loans with maturities of 15 years or more if prepaid during first 3 years.

(5% year 1, 3% year 2 and 1% year 3)
Long-term financing; Improved cash flow;

Fixed maturity; No balloons;

No prepayment penalty (under 15 years)

(7a) Small Loans

Is any 7a loan $350,000 and under, except the Community Advantage and Express loans
$350,000 Same as 7(a) Loans Same as 7(a) Loans Same as 7(a) Loans Same as 7(a) Loans Same as 7(a) Loans Same as 7(a) Loans Plus, all loan applications will be credit scored by SBA . If not an acceptable score, the loan can be submitted via full standard 7(a) or Express. Same as 7(a) Loans

SBAExpress

$350,000 50% May be used for revolving lines of credit (up to 7 year maturity) or for a term loan [same as 7(a)]. Up to 7 years for Revolving Lines of Credit including term out period. Otherwise, same as 7(a). Loans $50,000 or less; prime+ 6.5% Loans over $50,000; prime + 4.5% Same as 7(a) Loans Same as 7(a) Loans Fast turnaround; Streamlined process; Easy-to-use line of credit

SBA Veterans Advantage

Processed under SBAExpress $350,000 ———————- Processed under SBA 7(a) Loans $5 million SBAExpress $350,000 ———————- Processed under SBA 7(a) Loans $5 million Same as SBAExpress ————————- Same as 7(a) Loans Same as SBAExpress ———————————- Same as 7(a) Loans Same as SBAExpress —————————- Same as 7(a) Loans Same as SBAExpress —————————- Same as 7(a) Loans No guaranty fee. Ongoing fee of 0.546% ———————————- Same as 7(a) Loans Except guaranty fee for non SBAExpress loans up tp $500,000 will be reduced by 50%. Ongoing fee of 0.546% Same as 7(a) Plus, small business must be owned and controlled (51%+) by one or more of the following groups: veteran, active-duty military in TAP, reservist or National Guard member or a spouse of any of these groups, or a widowed spouse of a service member or veteran who died during service, or a service connected disability. Same as SBAExpress No guaranty fee ————————————— Same as 7(a) Loans but with a reduced guaranty fee.

CapLines:
1. Working Capital;
2. Contract; 3. Seasonal; and
4. Builders

$5 million Same as 7(a) Loans Finance seasonal and/or short-term working capital needs; cost to perform; construction costs; advances against existing inventory and receivables; consolidation of short-term debts. May be revolving. Up to 10 years, except Builder’s CAPLine, which is 5 years Same as 7(a) Loans Same as 7(a) Loans Same as 7(a) Loans Plus, all lenders must execute Form 750 & 750B (short-term loans) 1. Working Capital - (LOC) Revolving Line of Credit 2. Contract - can finance all costs (excluding profit). 3. Seasonal - Seasonal working capital needs. 4. Builder - Finances direct costs in building a commercial or residential structure

Community Advantage Mission-focused lenders only. Expires 03/31/2020

$250,000 Same as 7(a) Loans Same as 7(a) Loans Same as 7(a) Loans Prime plus 6% Same as 7(a) Loans Same as 7(a) Loans Small Loans Same as 7(a) Plus lenders must be CDFIs, CDCs, micro-lender or SBA Intermediary Lenders targeting underserved market.

International Trade

$5 million 90% guaranty (up to $4.5 million maximum guaranty) (Up to $4 million maximum guaranty for working capital ) Term loan for permanent working capital, equipment, facilities, land and buildings and debt refinance related to international trade Up to 25 years. Same as 7(a) Loans Same as 7(a) Loans Same as 7(a) Loans Plus, engaged or preparing to engage in international trade or adversely affected by competition from imports. Long term financing to allow small business to compete more effectively in the international marketplace

Export Working Capital Program

$5 million 90% guaranty (up to $4.5 million maximum guaranty) Short-term, working capital loans for exporters. May be transaction based or asset-based. Can also support standby letters of credit Generally one year or less, may go up to 3 years No SBA maximum interest rate cap, but SBA monitors for reasonableness Same as 7(a) Loans Same as 7(a) Loans Plus, need short-term working capital for direct or indirect exporting. Additional working capital to increase export sales without disrupting domestic financing and business plan

Export Express

$500,000 90% guaranty for loans of $350,000 or less; 75% guaranty for loans greater than $350,000 Same as SBA Express plus standby letters of credit Same as SBAExpresss Same as SBAExpress Same as 7(a) Loans Applicant must demonstrate that loan will enable them to enter a new, or expand in an existing export market. Business must have been in operation for at least 12 months (though not necessarily in exporting) Fast turnaround; Streamlined process; Easy-to-use line of credit Loan can be for direct or indirect exporting.

504 Loans Provided through Certified Development Companies (CDCs) which are licensed by SBA

 
504 CDC maximum amount ranges from $5 million to $5.5 million, depending on type of business or project. Project costs financed as follows: CDC: up to 40% Lender: 50% (Nonguaranteed) Equity: 10% plus additional 5% if new business and/ or 5% if special use property. Long-term, fixed-asset loans; Lender (nonguaranteed) financing secured by first lien on project assets. CDC loan provided from SBA 100% guaranteed debenture sold to investors at fixed rate secured by 2nd lien. CDC Loan: 10- or 20-year term fixed interest rate. Lender Loan: Unguaranteed financing may have a shorter term. May be fixed or adjustable interest rate Fixed rate on SBA Grow (504) Loan established when the debenture backing loan is sold. Declining prepayment penalty for 1/2 of term. SBA guaranty fee on debenture is 0.0%. A participation fee of 0.5% is on lender share, plus CDC may charge up to 1.5% on their share. CDC charges a monthly servicing fee of 0.625%-2.0% on unpaid balance. Ongoing guaranty fee is 0.697% of principal outstanding. Ongoing fee % doesn’t change during term. Alternative Size Standard: For-profit businesses that do not exceed $15 million in tangible net worth, and do not have an average two full fiscal year net income over $5 million. Owner Occupied 51% for existing or 60% for new construction. Low down payment - equity (10,15 or 20 percent) (The equity contribution may be borrowed as long as it is not from an SBA loan) Fees can be financed; SBA /CDC Portion: Long-term fixed rate Full amortization and No balloons

504 Loan Refinancing Program (Permanent) Provided through Certified Development Companies (CDCs) which are licensed by SBA

 
Same as 504 (see SBA Policy Notice 5000-1382 dated 05/26/2016 for complete program information) Loan to Value (LTV) Qualified and Secured Debt 90%. For projects that include “Business Operating Expenses (BOE)” the LTV is 85%. BOE may not exceed 15% of the fixed asset.  At least 85% of the proceeds of the loan(s) to be refinanced had to be originally used for eligible fixed assets. May include the financing of eligible business expenses as part of the refinancing. Same as 504  Same as 504 Same as 504 except, Ongoing guaranty fee is 0.731% of principal outstanding Loan(s) to be refinanced can’t be subject to a guaranty by a Federal agency, can’t be a Third Party Loan which is part of an existing SBA 504 project and must have been current on all payments for the past 12 months. Both the business and loan(s) to be refinanced must be at least 2 years old Business can access equity in their commercial real estate for business operating expenses or refinance property on reasonable terms. Fees can be financed; SBA /CDC Portion: Long-term fixed rate Full amortization and No balloons

Non-7(a) Loans Microloans Loans through nonprofit lending organizations

;
$50,000 Not applicable Working capital, supplies, machinery & equipment, fixtures; etc. Intermediary may chose to refinance debt. Cannot be used for real estate. Shortest term possible, not to exceed 6 years Negotiable with intermediary. Subject to either 7.75 or 8.5% above intermediary cost of funds. No guaranty fee Same as 7(a) Direct loans from nonprofit intermediary lenders; Fixed-rate financing; Very small loan amounts; Technical assistance available
                 

The International Trade Loan Program
Helps small businesses enter and expand into international markets. The proceeds may be used to acquire, construct, improve, or expand facilities or equipment in the United States that are then used to produce goods or services involved in international trade. Proceeds may also be used for working capital and to refinance debt not structured on reasonable terms and conditions. Under the International Trade Loan Program, the SBA can guarantee up to 90 percent of the loan amount, for a maximum guaranty of $4.5 million, less the amount of the guaranteed portion of other SBA loans outstanding to the borrower.

The Community Advantage Program
Helps meet the needs of lenders serving traditionally underserved communities. The program—available to mission-focused, community-based lenders, such as community development financial institutions previously unable to offer SBA loans—provides guaranties on loans of up to $250,000

The Community Advantage Program helps small businesses meet short-term and cyclical working capital needs through four specialized programs.

  • The Contract Loan Program finances costs associated with contracts, subcontracts, or purchase orders.
  • The Seasonal Line of Credit Program supports inventory, accounts receivable, or labor and materials above normal usage for seasonable inventory.
  • The Builders Line Program provides financing for small contractors or developers to construct or rehabilitate residential or commercial property.
  • The Working Capital Line of Credit Program is a revolving line of credit that provides short-term working capital.
    Businesses that provide credit to their customers or whose principal asset is inventory use the program most often.
    The guaranty and maximum loan amount is the same as the regular 7(a) program.

The Export Working Capital Program
This
is for exporters needing short-term revolving export working capital. The program provides a guaranty of up to 90 percent for loans up to $5 million. Loan maturities are generally 12 months or less, with a maximum maturity of three years. The loan proceeds can be used for the manufacturing costs of goods to export; to purchase goods or services for export; to support standby letters of credit to act as bid or performance bonds; or to finance foreign accounts receivable.

The SBA Express Program allows loans to be structured as either a revolving line of credit or a term loan. The SBA Express program provides a 50 percent guaranty for loans up to $350,000. Because a lender can use its own forms, analysis, and procedures to process, structure, service, and disburse SBA Express loans, the requirements for repayment are set by the lender, not the SBA.

The Export Express Program can enhance a company’s export development, and provides lenders with a 90 percent guaranty on loan amounts up to $350,000 and a 75 percent guaranty for larger loans up to $500,000. The loans can be structured as term loans or revolving lines of credit. Generally, loans made under Export Express are subject to the same loan processing requirements as SBA Express. As with SBA Express, the credit analysis and decision under Export Express are delegated to the lender.

For More Information Small Business Administration “Banker’s Guide to the SBA 7(a) Loan Guaranty Program",
Office of the Comptroller of the Currency "OCC" Community Developments Insights report
Office of the Comptroller of the Currency Small Business Resource Directory


For more information, see the OCC’s Community Developments Insights report on “SBA’s and Export Import Bank’s Working Capital Loan Guarantee Programs,” April 2011.

 

Quick View Loan Chart - Small Business Administration

 

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Government Contracting

CDC/504 loans
For Purchasing owner-occupied commercial real estate.

CAPLines
For Companies that need a line of credit that can be used over and over again


Export loans
For Export businesses needing to finance their export activity


Microloans
For Businesses that need a smaller amount of working capital up to $50k


Disaster loans.
For Companies that have been impacted by a declared natural disaster. 

Benefits to Banks using the SBA 7a Programs

SBA Loans: Types, Rates & Requirements

100 most active SBA 7(a) lenders

Facts
The SBA Loan Guarantee Program: How it Works

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