|
|
|
Program Details:
SBA 7(a) Loan Program
|
|
Loan Type:
|
SBA Guarantee of bank loan |
 |
Eligible
Business: |
Retail, commercial, service, manufacturing,
distribution businesses which meet SBA "small
business" size standards. |
|
|
Program
Purpose: |
Encourage banks to lend to small businesses by
providing a government guaranty |
|
|
|
Use: |
Working capital, inventory, equipment, real estate,
some business debt refinancing |
|
|
Maximum:
|
Maximum guarantee: 75% to 85% of bank loan; maximum
guarantee of $1.5 million; maximum loan $2 million. |
|
|
|
Term: |
Working capital: 5-7
Years
Equipment: 5-15 Years
Maximum: 15-25
Years |
|
|
|
Rates: |
Bank's rate, fixed or floating, normal maximum at
lowest national prime rate plus up to 2.75% |
|
|
|
Equity: |
10% to 30% |
|
|
|
Collateral: |
Personal guaranty; lien or mortgage on assets;
cosigners, etc. |
|
|
|
Fees: |
SBA charges a 2% to 3.5% guarantee fee based on loan
size |
|
 |
|
Financing for
Existing and
Startup Small Businesses
|
|
The SBA 7(a) Guarantee Program is designed to
encourage lenders to make loans to small businesses
by adding a federal guarantee as additional
security. Sometimes a lender might consider a small
business loan too risky under their normal
underwriting criteria, but the presence of a federal
guarantee for 75 to 80 percent of the loan can make
a difference.
Any bank is eligible to process SBA 7(a) loan
guarantees. Certain lenders are designated as
"Preferred Lenders" or "Certified Lenders," which
gives them expedited authority to process guarantee
applications.
Loans smaller than $150,000 may be processed through
the SBA's "SBA Express" programs, which
streamline the application process, reduce
paperwork, and cut down the processing time.
CCDC Partners with banks
providing services to package SBA 7(a) loans for the
bank. CCDC also can prepare the closing documents
for 7(a) loans.
Important Links:
|
|
|
|
