Transcript SMALL BUSINESS ADMINISTRATION FINANCIAL ASSISTANCE …

Neida Heusinkvelt
(816) 426-4906
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7(a) Loan Guaranty Program - 75-85%
Guarantees
 Made by private lenders – not a direct loan program
 Maximum loan amount can be up to $5,000,000
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7(a) program requirements:
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Good credit history
demonstrated record for success
good character
sufficient funds to operate the business at a profit
collateral the loan as fully as possible
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Flexible Maturities:
 Up to 10 Years for working capital
 Up to 25 years for fixed assets
▪ real estate, construction, equipment
Interest Rates:
 Negotiated between borrower and lender, can
be fixed or variable. However most interest
rates for 7a business deals are variable rates,
tied to prime rate.
 Typically cannot exceed base rate plus 2.75%
except with SBAExpress loans which can go
higher
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7(a) Program Guaranty Fees:
Maturity
1 Yr or less
SBA Portion
Guaranty Fee
Any $$
0.25%
Over 1 yr
$127,500 or less
2.0%
Over 1 yr
More than $127,500
(lender keeps 25% of fee)
3.0-3.75%
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7(a) SBAExpress - Up to $350,000 and
under - with 50% guaranty
- Under Small Business Jobs Act of 2010 SBA
temporarily has increased the maximum loan SBX
amount to $1,000,000 thru September 28, 2011
 lender uses its own documentation
 can be used for a variety of purposes, including
funding working capital lines of credit
 In past decade between 35-65% of SBA lending
has been done thru this SBAExpress program!
 (Community Express pilot version expired 4/30/ 2011.)
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7(a) Patriot Express - Up to $500,000 and under
 75% - 85% guaranty
 Started June 28, 2007 & extended to December 31, 2012
 Same processing path as Regular SBAExpress
Created to Serve Special Customers
 Honorably-discharged Veterans
 Service-Disabled Veterans
 Service Members Leaving Active Duty eligible for Transitional
Assistance Program (TAP)
 Reservists and National Guard Members
 Current Spouses of any of the above
 Widowed Spouse of a Service Member or Veteran who died
during service, or of a service-connect disability
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 7(a) Lender Advantage –
Up to $350,000 and under
 75% - 85% guaranty
 Started as a pilot program in the Midwest in May 2008
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Key Features
 Designed for small SBA loan volume lenders (rural banks and
small community lenders)
 Streamlined loan application
 Simplified loan eligibility questionnaire
 Expedited SBA target processing time - 5 days
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New Pilot versions of Small Loan Advantage and
Community Advantage Programs were added
February 17, 2011
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CAPLINES Loans
Used to meet short-term
and cyclical working
capital needs
Can be a one project type
deal or can be on a
revolving basis. Three
Types: Seasonal,
Contract, Small Builder
Also, Two Types of
Asset Based Loans
Are Available:
•Standard Asset
Based
•Small Asset
Based
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 Loan size: $500,000 minimum - $5 million maximum
 Maximum of 75% guaranty
 Loan guaranty product for revolving LOCs that target retail
dealers of new and used titleable inventory (automobiles, boats,
RVs, motorcycles, mobile homes, etc).
 Minimum loan maturity of 1 year and maximum of 5 years
 Collateral must be a first lien on all titleable inventory acquired
with proceeds for this loan.
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Participating Lender must have existing floor plan financing policies and
procedures to meet SBA approval.
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Will remain available until September 30, 2013. It is a pilot 7(a) loan
guaranty program – using same pool of funds as other 7(a) loans.
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Export Working Capital Loan 90% Guaranty
Pre-Export and Post-Export Transactions can be
Financed
• Paid back from proceeds of the export sales
• Maximum Loan size is $5.0 Million
 International Trade Loan– Up to a 90% Guaranty
• Used for producing goods or services within the
U.S. to export elsewhere
• Can help firms adversely affected by import
competition
• Maximum Loan Size is $5.0 Million
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504 Fixed Asset Loan
Long-Term financing for fixed assets like
buildings & equipment (not vehicles).
• Up to $5.0 million in SBA-backed debentures –
more for public policy goals like women-owned and
veteran-owned businesses and manufacturers.
• Loan must generally create or retain one job for
every $65,000 of debenture proceeds provided
by the SBA.
• Available throughout KS and MO from CDCs
• Typical Expansion project is 50%/40%/10%
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Jobs Act Program started February 28 and ends September 27, 2012.
Specific pool of SBA debenture dollars set aside by Congress.
 No minimum – max is $5 Million.
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Uses the existing Certified Development Companies (CDC) processing
procedure of the 504 loan program.
 Existing business loan must be ballooning.
 Existing loan incurred not less than 2 years ago must have been
current for the past year with no payment being deferred or past due
for more than 30 days.
 Proceeds are to be used to refinance qualified debt with no money
going to expansion or purchases.
 Independent appraisal of the FMV of the project assets and any
additional assets offered as additional collateral must be provided and
dated within 6 months of the application.
 85% of the refinance must have been originally eligible 504 purposes.
 Structure is 50%/40%/10%.
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MICROLOAN - $35,000 or less
 Not presently available thru SBA in the KC area but
may be available locally from other state and economic
development organizations.
SURETY BOND GUARANTEES – provides surety guarantees
for the benefit of service businesses who have contracts
that require surety bonding. This program is processed
regionally in Denver CO
ARC Loan Program expired on September 30, 2010.
This was a temporary program initiated by the Recovery
Act of 2009.
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www.sba.gov – new and improved….
www.kcsourcelink.com – Kansas City area
KS SBDC Network – locations in Topeka, Emporia,
Fort Hays, Garden City, Overland Park, Pittsburg,
Lawrence, and Wichita
MO SBTDC Network –locations in Columbia,
Warrensburg, Chillicothe, Joplin, Maryville, Kansas
City, Springfield, St. Joseph
WBC – Lenexa KS
PAC- Kansas City MO, BIC – Kansas City MO
SCORE – chapters in most major cities
August 19, 2011
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Number of SBA Loans Approved FY2008 to YTD 2011
1,000
900
800
700
600
500
400
300
200
100
0
504
7A
2008
504
7A
2009
ARC
504
7A
2010
ARC
504
7A
2011
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Dollar Amount of SBA Loans Approved
FY2008 to YTD 2011
$350,000,000
$300,000,000
$250,000,000
$200,000,000
$150,000,000
$100,000,000
$50,000,000
$0
504
7A
2008
504
7A
2009
ARC
504
7A
2010
ARC
504
7A
2011
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Creates a documented niche reputation as “small business
friendly” lender as compared to its peers.
 Can provide an additional source of fee income.
 The guaranteed portion of the loan is saleable on an active
secondary market which can provide liquidity.
 The guaranteed portion of SBA loans has a lower risk-based
capital requirement.
 Can provide support for loans with less than optimal
collateral coverage.
 SBA Certified Development Company (504) loans can
provide fixed asset financing for up to 90% of the project
cost.
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