The document discusses several SBA loan programs to support small businesses. The main programs covered are: - Regular 7(a) Guaranty Loans which SBA guarantees up to 85% of loans from banks for working capital and other needs. Loan amounts can be up to $2 million with variable interest rates. - SBA Express Loans which have lower paperwork and can be approved more quickly, with loan amounts up to $350,000 and variable interest rates up to 6.5% over prime. - SBA Patriot Express Loans which offer favorable terms for veterans and military community with loans up to $500,000 and fixed rates between 2.25-4.75% over prime.

1. SBA Programs Presented by: Michael Elkin Assistant District Director Entrepreneurial Development U.S. Small Business Administration San Francisco District Office 455 Market Street, 6th Floor San Francisco, CA 94105 (415)744-6820

2. Bank Financing with SBA’s Guarantee SBA is not a direct lender SBA partners with banks and lenders SBA guarantees bank loans (50%-85%) Bank’s risk is offset by the SBA guaranty Applicants apply directly to the bank/lender Bank decides when to use the SBA Bank gets paid if business fails Business remains liable for the debt

3. Regular 7(a) Guaranty Loan Terms SBA does not set actual terms, but does set parameters – Terms are negotiated between bank & borrower Maximum Loan Amount: $2,000,000 Maximum SBA Guaranty 75% to 85% of the loan, up to $1.5 million maximum Term (maturity) based on use of proceeds Generally 7-10 years for non-real estate

4. Regular 7(a) Guaranty Loan Terms (continued) SBA Guaranty fee: 2% to 3½% of SBA-Guaranteed amount For $100,000 loan, fee = $1,700 For $500,000 loan, fee = $11,250 Guaranty fee may be financed as part of loan Interest Rate Usually variable rate loan Generally Prime plus up to 2.75% Rate can be higher for loans under $50k or for SBA Express Loans

5. SBA Guaranty Loan Eligible Use of Proceeds All Legitimate Business Purposes Inventory Machinery & Equipment Working Capital Real Estate (owner-occupied only) Debt repayment (business debts only) Business Acquisitions Franchises (must be an eligible franchisor)

6. SBA Loan – Eligibility Issues Must be a for-profit business Must qualify as a small business concern Must be an eligible type of business Must meet personal financial resources test Must be at least 51% owned by U.S. Citizens or Legal Permanent Residents Cannot be on probation or parole

7. Benefits of the SBA Loan Reduces lender’s risk , making it more likely to approve a small business loan application Provides a longer loan term , or maturity All SBA loans are fully amortizing, i.e., no balloon payment

8. What Do I Need to Qualify? Five C’s of Credit C apacity to Repay C apital C apable Management C haracter & Credit C ollateral

9. How to Apply for an SBA Loan, continued Gather your business & personal financial information Personal financial statement Personal income tax returns for the last 3 years Business financial statements & tax returns for 3 years if already in business Decide on a Lender – factors to consider: Your experience with the lender Type of lender – National, regional, community bank

10. SBA Guaranty Loan Process SBA 1. 2. 4. $$ Business Owner Lender/Banker Business Owner applies to Lender Lender contacts SBA if lender requests SBA guaranty If approved, SBA guarantees lender’s loan Lender then can disburse loan to Business Owner 3.

11. SBA Express Loan Loan amounts up to $350,000 Offered by participating SBA Express lenders Variable interest rate – Up to 6.5% over prime for loans of $50,000 or less; up to 4.5% over prime for loans over $50,000 Loan term of 7 to 10 years May be used as a line of credit with a term up to 7 years No collateral required for loans up to $25,000

12. SBA Patriot Express Loan For Veterans & spouses and military community Fast turnaround for approvals Lowest interest rates, 2.25% - 4.75% over prime Maximum loan amount - $500,000 Use of Proceeds same as for 7(a) Apply through specially approved lenders

13. Other SBA Loan Programs SBA 504 Loan Only for Purchase/Improvement of long-term fixed assets such as real estate Apply through a lender, or an SBA-approved Certified Development Company (CDC)

14. SBA Microloan Program Loans up to $35,000 (average $10,500) Made by “Microloan Intermediaries” funded by SBA Fixed interest rate – ranges from 8 to 11% Maximum loan term is 6 years, fully amortized Training and technical assistance is provided to the borrower Apply to the SBA Microloan Intermediary that serves your county

15. SBA Microloan Intermediaries OBDC Small Business Finance www.obdc.com , 510-763-4297 Alameda, Contra Costa, Solano counties Southeast Asian Community Center 415-885-2743 Alameda, Contra Costa, Marin, Merced, Sacramento, San Francisco, San Joaquin, San Mateo, Santa Clara & Stanislaus counties

16. SBA RESOURCES Service Corp of Retired Executives Small Business Development Centers

17. SBA RESOURCES Women Business Centers AnewAmerica Community Corp. Bayview Business Resource Center Renaissance Entrepreneurship Center Women’s Initiative for Self Employment C.E.O. Women

18. SBA Websites SBA Home Page: www.sba.gov SBA Loan Programs: www.sba.gov/financing SBA San Francisco District Office: www.sba.gov/ca/sf