the sba_lender's_advantage

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  • Quick Reference Matrix Fact Sheet

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  • 1. The SBA Lender’s Advantage Guaranteed Lending Programs Colorado Springs SBA Loan Program Overview 4/27/2010 FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 2. Updates on SBA Programs
    • The 2009 American Recovery & Reinvestment Act
    • Program Overviews
      • 7 (a) Loan Program
      • ARC
      • 504
      • Small Business Administration Express
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 3. Changes in SBA
    • Seeking for an increase on the cap on 7(a), 504, and microloans
    • Larger support for job creation
    • Looking to continue extending Small Business Administration’s successful recovery act programs
    • Increase in the 2010 and 2011 budget
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 4.
    • Upfront Borrower Guarantee Fees temporarily eliminated
      • All 7(a) loans
        • Exceptions - Loans of 12 months or less and ARRA Prohibited Uses
      • 504 loans, applies to:
        • 3 rd party participation fees
        • CDC processing fees
      • Specific ARRA Prohibited Uses, but if otherwise eligible, may still submit under regular processes & fee scale
    • Up to 90% Guaranty, temporarily
      • Effective Dates: subject to funding availability
      • All 7(a) and Pilot Loan Programs (Except SBA Express)
      • Specific Prohibited Uses, but if otherwise eligible, may still submit under regular processes and guaranty %
    • ARRA Prohibited Uses
      • States or local governments not eligible
      • No casinos, gambling establishments, aquariums, zoos, golf courses or swimming pools
    • ARC Business Stabilization Loans
    • Refinancing under 504 – permanent revision
    • Dealer Floor Plan Financing Pilot Initiative
    • Secondary Market Thaw
    • Surety Bonds - Increased from $2m to $5m. Up to $10m in specific cases
    • SBA Website for ARRA Info: www.sba.gov/recovery/
    2009 ARRA Incentives FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 5. SBA’s ARRA Incentives Temporary Loan Program Changes
    • SBA 7(a) Guaranteed Loan Program – Standard, CLP or PLP
      • $2 million max
      • No Borrower Fee
      • up to 90% guarantee
    • Small/Rural Lender’s Advantage Initiative
      • $350,000 max
      • No Borrower Fee
      • up to 90% guarantee
    • SBA Express
      • $350,000 max
      • No Borrower Fee
      • 50% guarantee (NO CHANGE)
    • Patriot Express – for Vet/Military transition
      • $500,000 max
      • No Borrower Fee
      • up to 90% guarantee for specific borrowers
    • Community Express – T.A requirement
      • $250,000 max
      • No Borrower Fee
      • up to 90% guarantee with Technical Assistance
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
    • Export Express –for exporters
      • $250,000 max
      • No Borrower Fee
      • up to 90% guarantee
    • Export Working Capital – for exporters
      • $2 million max
      • No Borrower Fee
      • 90% guarantee (NO CHANGE)
    • 504 Loan Program
      • Up to $2m routinely, or $4m if manufacturer
      • No Borrower Fee
      • No 3 rd Party Lender Fee
      • 1 st Mortgage Loan Refinance
    • ARC Loans
      • $35,000/borrower
      • No Borrower Fee
      • No Interest to Borrower
      • 100% guarantee
    • Dealer Floor Plan Financing Pilot
      • $500,000-$2mil
      • 60-75% Guarantee
      • Limited Pilot Initiative
    NEW NEW NEW
  • 6. ARRA Funding Extension
    • Additional $80million approved to continue increased guarantee % and reduced fee incentives
        • Will support more than $20 billion in small business lending
        • Doesn’t impact ARC or Microloans – original ARRA funds still available
      • Apps formerly in SBA’s Recovery Loan Queue
        • Original ARRA funding for 7(a) and 504 incentives was exhausted 3/31/2010
        • Recovery Act Queue was created to await availability of further funding
        • Those who chose to wait in queue were funded first with new ARRA Funding extension
        • No retroactive guarantee % increases or fee relief for Non-Recovery loans funded during transition period
        • Non-Recovery Act loans can’t be cancelled and resubmitted to receive incentives
      • New Loan Approvals
        • Applications to be considered beginning 5/1/2010
        • Higher guarantee percentage requests authorized through 5/30/2010
        • Fee relief authorized through the sooner of funding exhaustion or 9/30/2010
    • Recovery Queue system will be reinstated for any future transition periods
      • www.sba.gov/recoveryq
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 7. 7(a) Loan Program Specifics
    • Maximum loan size is $2 million
    • Maximum SBA exposure is $1.5 million
    • Guaranty % ( limited time):
      • 90% for loans of $1,666,666 or less
      • Anything above will receive a % calculated by formula
        • $1,500,000/Loan Amount = Guarantee %, rounded to the 2 nd decimal
      • If Prohibited Use under ARRA or funds are exhausted, then defaults to regular program %s
        • 85% for loans $150,000 or less
        • 75% for loans $150,001 or more
    • Guaranty fee ( limited time):
      • No Upfront Borrower Guaranty Fee (limited time), Except for
        • Short term loans of 12 mos or less, then
          • 0.25 point fee
        • If Prohibited Use under ARRA or funds are exhausted, then defaults to regular program %
          • 2% of guaranteed portion on loans of $150K or less (lender retains basis points)
          • 3% of guaranteed portion on loans over $150,001 - $700K
          • 3.5% of total guaranteed portion for $700,001 - $1million
          • PLUS an additional .25% on any guaranteed portion over $1 million
    • Can be used for any combination of eligible uses of proceeds
      • EXCEPT RLOCs - Use CAPLINES or Express Programs
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 8. Uses of Loan Proceeds
    • SBA loan may be used for most business purposes , including:
    • Real Property
    • Machinery and Equipment
    • Inventory, Furniture and Fixtures
    • Leasehold Improvements
    • Debt Restructuring
    • Working Capital
    • RLOCS (Express and CAPLINES ONLY)
    • Miscellaneous - Refer to SOP 50-10-5(b) for Clarifications
      • Franchises
      • Changes of Ownership
      • Intangibles
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
    • SBA proceeds may not be used for:
    • Floorplan financing - Except thru DFP Pilot Program (began 7/1/09)
    • Distribution to owners or principals
    • Payment of delinquent trust accounts
    • Acquisition of less than 100% of a business
    • Other Program-specific restrictions
  • 9. 7a Loan Program
    • Term of the loan should equal the useful life of the proceeds
    • Limited prepayment penalty
    • No job generation requirement
    • All business collateral available is required
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 10. ARC
    • A deferred-payment loan up to 18 months
    • Maximum Loan of $35,000
    • No fees
    • 100% loan gurarantee to the lender
    • Interest to be paid to the lender
    • Up to a term of 5 years
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 11. 504
    • Long term fixed rate financing
    • Proceeds are generally used for Real Estate purchases and construction
    • Loan amounts up to $2,000,000
    • Must generally create or retain one job for every $50,000 of debenture proceeds
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 12. SBA Express Program
    • Loans Up to $350,000
    • 50% Guaranty
    • Regular 7(a) maturity guidelines
    • Mainly Regular 7(a) eligibility & uses of proceeds guidelines
    • May be Revolving Lines of Credit (7 year maximum term)
    • Over loan life, RLOCs may be increased up to the $350k max (no 20% of total loan limit)
    • Loans under $25,000 (or up to your bank policy) may be unsecured
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 13. Micro Loan Program
    • Provides small loans up to $50,000
    • Applications are submitted to a micro loan lender (Colorado Enterprise Fund & Accion)
    • Interest rates vary depending on lender
    • Maximum term allowed is six years
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 14. Eligibility – All Programs
    • To be eligible (not qualified) for SBA assistance, businesses must:
    • Demonstrate need
    • Be size eligible
    • Be eligible as to business type , and
    • The uses of loan proceeds must be eligible
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co
  • 15. Contact
    • Bob Martin
    • Lender Relations Specialist
    • Colorado District Office
    • 303-844-2607
    • Email robert.martin@sba.gov
    FY 2010 Colorado District Office – 303-844-2607 - www.sba.gov/co