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

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