Sba loan programs

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Sba loan programs

  1. 1. Loan Programs<br />Maria P. Hughes<br />San Diego District Office<br />
  2. 2. How Does SBA Help?<br />Management Assistance<br />Financial Assistance<br />Government Contracting<br />Disaster Relief<br />Advocacy<br />
  3. 3. SBA Financial Assistance<br />Guaranteed Loans<br />SBA Lending Partners<br />No Direct Lending<br />In FY 2010 SD District Office guaranteed 606 loans worth $228.5 million<br />No grants<br />
  4. 4. SBA Business Loan Programs<br />7(a) General Business Loan Program<br />CAPLines (Lines of Credit)<br />SBA Community Express<br />Export Working Capital Program<br />International Trade<br />Certified Development Company (CDC) Program<br />7(m) Microloan Program<br />
  5. 5. 7(a) Guaranty Loan Program<br />Maximum loan is $5 million<br />Guaranty up to $3.75 million<br />Guaranty Percentages:<br />85% for loans <=$150.0 k<br />75% for loans > $150.0 k<br />May vary with other programs<br />
  6. 6. Use of Loan Proceeds<br />Any reasonable business purpose<br />Purchase machinery & equipment<br />Working capital<br />Leasehold improvements<br />Receivables & inventory<br />Refinance existing debt<br />Acquisition/Construction of real estate<br />Business acquisitions<br />
  7. 7. Flexible Terms<br />Maturities<br />Based on use of proceeds & ability to repay<br />Up to 10 years for working capital<br />7 to 10 years for machinery & equipment<br />25 years for real estate – maximum maturity<br />Weighted average for multiple purposes<br />
  8. 8. Flexible Terms<br />Interest Rates<br />Negotiated between bank and borrower<br />Based on WSJ Prime + Spread<br />Fixed or Variable Rate<br />SBA guidelines based on loan maturity & amount<br />< 7 years: Maximum Rate = Prime + 2.25%<br />>= 7 years: Maximum Rate = Prime + 2.75%<br />Rates slightly higher for loans of $50.0 k or less<br />
  9. 9. Guaranty Fees<br />Based on guaranteed portion of loan<br />$150.0 k or less then fee = 2% of guaranteed portion<br />>$150.0 k & <= $700.0 k then fee = 3% of guaranteed portion<br />>$700.0 k then fee = 3.5% of guaranteed portion<br />Maturities of < 12 months fee is .25% of 1.0%<br />Fee may be financed with loan proceeds<br />
  10. 10. Fees Associated With SBA Loan<br />Guaranty Fee<br />Packaging Fees<br />Financed with loan proceeds<br />Limited Prepayment Penalties <br />Loan maturity >= 15 years<br />Prepayment $ exceeds 25% of outstanding balance<br />Occurs within 3 years of disbursement<br />
  11. 11. Eligibility<br />Small by SBA Size Standards<br />Operated as a for-profit<br />Business located in U.S.<br />Unable to secure reasonable financing through other means<br />Some businesses ineligible<br />
  12. 12. General Size Standards<br />Standards vary by industry<br />Industry classification based on NAICS<br />Based on average Annual Gross Receipts or number of employees<br />Manufacturing – 500 employees<br />Wholesaling – 100 employees<br />Services, Retailing, Construction - $6.5 million to $31.5 million<br />Agriculture - $.75 million<br />
  13. 13. CDC (504) Loan Program<br />Administered by Certified Development Company (CDC)<br />Fixed asset financing<br />Commercial Real Estate<br />Capital Equipment<br />Assists with business expansion<br />Promotes economic development<br />Job creation<br />Increases local tax revenues<br />
  14. 14. CDC (504) Loan Program<br />Maximum debenture up to $5.0 million<br />Total project size may be larger<br />Proceeds may not be used to finance:<br />working capital<br />Inventory<br />Refinance debt<br />
  15. 15. Micro Loan Program<br />SBA loans funds to non-profit intermediary<br />Intermediary makes small loans to businesses<br />Loan amounts up to $50.0 k<br />Maturities up to 6 years<br />Business receives technical assistance through Intermediary<br />
  16. 16. Micro Loan Program<br />Intermediary<br />CDC Small Business Finance<br />2448 Historic Decatur Road, Suite 200<br />San Diego, CA 92106<br />Susan Lamping, Program Administrator<br />T (619) 291-3594<br />www.cdcloans.com<br />
  17. 17. SBA’s Credit Criteria<br />Cashflow<br />Commitment<br />Character<br />Credit<br />Collateral<br />
  18. 18. Application Process<br />Apply for loan through SBA Participating Lender<br />Lender submits application for SBA review and guaranty<br />After SBA approval, loan closes and lender disburses funds<br />
  19. 19. Why an SBA Guaranteed Loan?<br />Longer terms – Eases cashflow<br />Competitive Rates<br />No balloon payments<br />No points<br />Assists borrowers with shortfalls in equity and/or collateral<br />Lender’s risk reduced in transaction<br />
  20. 20. www.sba.gov<br />
  21. 21. San Diego District Office<br />U. S. Small Business Administration<br />550 West C Street, Suite 550<br />San Diego, CA, 92101<br /> T (619) 557-7250<br />Email: sandiego@sba.gov<br />

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