SBA

Maximum loan amount$5 millionMaximum SBA guarantee %85% for loans up to $150,000 and 75% for loans greater than $150,000 Interest rate Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum.

Eligibility decision By the SBA. Qualified lenders may be granted delegated authority (PLP) to make eligibility determinations without SBA review. Revolving lines of credit Up to 10 years. (Permitted only under CAP Lines submission. See below) SBA turnaround time 5-10 business days Forms SBA Form 1919 and SBA Form 1920 are required for every loan. Other SBA Forms may be required. Collateral Lenders are not required to take collateral for loans up to $25,000. 

For loans in excess of $350,000, the SBA requires that the lender collateralize the loan to the maximum extent possible up to the loan amount. If business fixed assets do not “fully secure” the loan the lender may include trading assets (using 10% of current book value for the calculation), and must take available equity in the personal real estate (residential and investment) of the principals as collateral.Credit decision By the SBA. Qualified lenders may be granted delegated authority (PLP) to make credit decisions without SBA review.

Maximum loan amount

$350,000

Maximum SBA guarantee %

85% for loans up to $150,000 and 75% for loans greater than $150,000.

Interest rate

Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum.

Eligibility decision

By the SBA. Qualified lenders may be granted delegated authority (PLP) to make eligibility determinations without SBA review.

SBA turnaround time 5-10 business days

Forms

SBA Form 1919 and SBA Form 1920 are required for every loan. Other SBA Forms may be required.

Collateral

Lenders are not required to take collateral for loans up to $25,000. For loans over $25,000, up to and including $350,000, the lender must follow the collateral policies and procedures that it has established and implemented for its similarly-sized non-SBA-guaranteed commercial loans, but at a minimum the lender must take a first lien on assets financed with loan proceeds and lender must take a lien on all of the applicant’s fixed assets including real estate. Lender is not required to take a lien against applicant’s real estate when the equity is less than 25% of the fair market value. The lender may limit the lien taken against real estate to the loan amount.

Credit decision

By the SBA. Qualified lenders may be granted delegated authority (PLP) to make credit decisions without SBA review.

The SBA Express program features an accelerated turnaround time for SBA review. The SBA will respond to your application within 36 hours.

Maximum loan amount

$350,000

Maximum SBA guarantee %

50%

Interest rate

Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum.

Eligibility decision

By the lender.

Revolving lines of credit

Up to 7 years with maturity extensions permitted at the outset.

SBA turnaround time

Within 36 hours.

Forms

Lender primarily uses own forms and procedures, plus SBA Form 1919.

Collateral

Lenders are not required to take collateral for loans up to $25,000. May use their existing collateral policy for loans over $25,000 up to $350,000.

Credit decision

By the lender.

Purchase

Lender may request expedited SBA purchase on small loans or in situations where liquidation may be delayed.

The Export Express program provides exporters and lenders a streamlined method to obtain SBA-backed financing for loans and lines of credit up to $500,000. Lenders use their own credit decision process and loan documentation. The SBA will respond to your application within 24 hours.

Maximum loan amount

$500,000

Maximum SBA guarantee %

90% for loans of $350,000 or less, 75% for loans more than $350,000.

Interest

Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum.

Eligibility decision

By the lender.

Revolving lines of credit

May not exceed 7 years

SBA response time

24 hours

Forms

Lender primarily uses own forms and procedures, plus SBA Form 1919, Borrower Information.

Collateral

Lenders follow collateral policies and procedures that the lender has established for its non-SBA-guaranteed loans.

Credit decision

By the lender

SBA Senior International Credit Officers can provide in-house training to help lenders become proficient in the Export Express program. 

Export Working Capital loans are for businesses that can generate export sales and need additional working capital to support these sales. Lenders review and approve applications and submit the request to the U.S. Export Assistance Center location servicing the exporter's region.

Maximum loan amount

$5 million

Maximum SBA guarantee %

90%

Interest

Lenders and borrowers can negotiate the interest rate, but it may not exceed the SBA maximum.

Eligibility decision

By the SBA. Qualified lenders may be granted authorization to make eligibility decisions.

Revolving lines of credit

Terms of 12 months or less

SBA turnaround time

5-10 business days

Forms

SBA-EIB 84-1, plus attachments.

Collateral

Export-related inventory and receivable generated by export sales financed with EWCP funds. The SBA also requires personal guarantee of owners with 20% or more ownership.

Credit decision

By the SBA.

Veteran-owned businesses are one of the fastest-growing and significant segments of the U.S. economy. SBA loans made to veteran-owned small businesses come with reduced fees. 

To be eligible to receive fee relief through the Veterans Advantage program, a small business must be at least 51 percent owned and controlled by someone in one of the following groups:

• Honorably discharged veterans.
• Active Duty Military service member eligible for the military’s Transition Assistance Program (TAP).
• Service-disabled veterans.
• Reservists and/or active National Guard members.
• Current spouse of any veteran, active duty service member, Reservist, National Guard member, or the widowed spouse of a service member who died while in service or as a result of a service-connected disability.

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

• Seasonal CAPLine: 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 CAPLine: This line finances the direct labor and material cost associated with performing assignable contracts. It can be revolving or non-revolving.
• Builders CAPLine: This line can finance direct labor and material costs for a small general contractor or builder constructing or renovating commercial or residential buildings. The building project serves as the collateral, and loans can be revolving or non-revolving.
• Working CAPline: 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.

With the exception of the Builders CAPLine, the maximum maturity on a CAPLine loan is 10 years.  Builders CAPLine loans must not exceed five years.  Holders of at least 20 percent ownership in the applicant business are required to guarantee the loan

SBA Loans and SBA Loan Approval

Are you looking to expand or modernize your small business? If you’re exploring your financing options, then SBA’s 504 Loan Program (or Certified Development Company (CDC) loan) may be for you. Designed especially to help small businesses grow, you can use funds to make purchases for real estate and equipment, just to name a few. Read on for more details to see if this is a good option for you.

Am I eligible?

In addition to operating your business for profit, you’ll need to have a feasible business plan and relevant management expertise to be considered eligible for a 504 loan. As with any business seeking SBA’s financial assistance, you’re also required to do business in the United States or its territories. And you must have tried to use other financial resources, including personal assets, before applying for a loan. Here are some other requirements to consider:

Your business must have a tangible net worth of less than 15 million dollars.

Your business must have an average net income less than $5 million after taxes for the preceding two years.

You must have the ability to repay the loan on time from the projected operating cash flow of your business.

How can I use the funds?

Loan funds can be used to:

Purchase land;

Purchase existing buildings;

Purchase long-term machinery and equipment;

Purchase improvements (including grading, street improvements, utilities, parking lots and landscaping); or

Build new facilities or modernize, renovate or convert existing facilities.

A 504 loan cannot be used for:

Working capital or inventory;

Consolidating, repaying or refinancing debt (although for a portion of the project, you may refinance debt associated with buying or renovating equipment or facilities); or

Speculation or investment in rental real estate.

What are the amounts and repayment terms?

Maximum loan amounts are determined by how they’ll be used ­– if they support goals associated with job creation, public policy or small manufacturing. The loan terms also vary. For land and buildings, the loan term is 20 years; it’s a 10-year term for machinery and equipment.