Guide To Special SBA 7a Loans

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Information about Guide To Special SBA 7a Loans
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Published on January 31, 2014

Author: FitSmallBusiness

Source: slideshare.net

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In today's presentation we are going to guide you on how to fill out Patriot Express And Other Special SBA Loans. So Let's get started!

Guide to Special 7a Loans

The SBA 7a Loan Is the most common type of loan backed by the SBA. These loans are issued by an SBA-backed lender, who will guide you through the application process. There are a number of specialized 7a loans designed to expedite the loan process, target certain demographics, or assist certain types of businesses.

The SBA 7a Loan This guide will help you understand the nuances of these various 7a loans in order to help you find the loan that is best for you and your business. This guide will cover the following SBA 7a loans: (If you’re not familiar with the basic 7A loans, we recommend first reading SBA Loans - The Ultimate Guide. )

Type Maximum Turnaround Time Purpuse Maximum Amount SBA Express 36 Hours Quick Approval $350,000 24 Hours Quick Approval For Exporters $500,000 36 Hours Quick Approval For Veteran Owned Business $500,000 10 Business Short-term Or Seasonal Financing Needs Days $5 Million Export Express Patriot Express CAP Lines Export Working 10 Business Days Capital Financing For Export Related Transactions $5 Million

Type Maximum Turnaround Time Purpuse Maximum Amount International Trade 10 Business Financing For Building An Export Business Days $5 Million Small/Rural Lender Advantage 5 Business Days Support Business Located In Rural Areas $350,000 Small Loan Advangtage 5 Business Days Provide Pre-Approval For Business Located In “Underserved” Areas $350,000 Community Advantage Enabling Community 10 Business Lender to Loan Business Located In Days “Underserved” Areas $250,000

SBA Express Overview: The SBA Express features an accelerated turnaround time for SBA review, but with a smaller maximum loan amount. The SBA will respond to your application within 36 hours, but the maximum you can only borrow is $350,000, rather than the $5 million allowed under the standard 7a. Maximum Loan Amount: $350,000

SBA Express Maturity: Standard 7a terms. Interest Rates: : Lenders and borrowers can negotiate the interest rate. Rates can be fixed or variable and are tied to the prime rate, LIBOR, or the optional peg rate. They may not exceed SBA maximums: lenders may charge up to 6.5 % over the base rate for loans of $50,000 or less, and up to 4.5 % over for loans over $50,000.

SBA Express Turnaround time: 36 hours. Forms: Lender forms, and SBA form 1919 Collateral: Lenders are not required to take collateral for loans up to $25,000; they may use their existing collateral policy for loans over $25,000 up to $350,000.

SBA Express The Bottom Line: The SBA Express may be a good option for those looking for loan under $350,000. The simplified application process and quicker turnaround time make this an appealing alternative to the standard 7a. For more information, click here.

Export Express

Export Express Overview: The SBA Export Express Program is a streamlined method to obtain SBAbacked financing for loans and lines of credit up to $500,000. Lenders use their own credit decision process and loan documentation, and the SBA provides an expedited eligibility review. The funds must be used to enhance the business’s ability to export goods and services.

Export Express Maximum Loan Amount: $500,000 Maturity: Standard 7a terms. Interest Rates: Standard 7a terms. Turnaround time: 24 hours. Forms: Lenders forms, and SBA form 1919

Export Express Collateral: Collateral is based on the policies and procedures established by the lender for its non-SBA-guaranteed loans. The Bottom Line: The SBA Express is a good option for businesses that need $500,000 or less in loans to begin or expand their export business. For more information, click here.

Patriot Express

Patriot Express Overview: The Patriot Express Program is designed for small businesses that are 51 percent or more owned or controlled by veterans. Maximum Loan Amount: $500,000 Maturity: Standard 7a terms. Interest Rates: Standard 7a terms. Turnaround time: 36 hours.

Patriot Express Forms: Lender primarily uses own forms and procedures. Collateral: Lenders are not required to take collateral for loans up to $25,000 May use their existing collateral policy for loans over $25,000 up to $350,000, but must take available collateral for loans greater than $350,000.

Patriot Express The Bottom Line: The Patriot Express is an excellent option for service members and spouses. It provides similar terms to the 7a express, but with a specific focus on military families.

CAP Lines

CAP Lines CAPLines is an umbrella program designed to help small businesses meet their short-term and cyclical working-capital needs. It features five lines of credit: • Seasonal Line • Contract Line • Builders Line • Standard Asset-Based Line • Small Asset-Based Line Click here to read the full article

CAP Lines Maximum Loan Amount: $5 Million Maturity: : Each of the five lines of credit has a maturity of up to five years Interest Rates: Standard 7a terms. Turnaround time: Up to 10 business days. Forms: Standard 7a terms.

CAP Lines Collateral: Holders of at least 20 percent ownership in the business are generally required to guarantee the loan. Inadequate collateral will not be the sole reason for denial of a loan request, but the nature and value of that collateral will factor into the credit decision.

CAP Lines The Bottom Line: CAPLines are a good option for businesses that are heavily influenced by seasonal business patterns. While this program may not be any faster or less complicated than the conventional 7a loans, there may be some advantages in terms or repayment options and interest rates. For more information, click here.

CAP Lines Overview: SBA's Export Working Capital Program loans are designed for businesses in need additional working capital to support potential export sales. Maximum Loan Amount: $5 Million Maturity: Standard 7a terms. Interest Rates: Standard 7a terms. Turnaround time: 5-10 business days.

Export Working Capital

Export Working Capital Forms: SBA-EIB 84-1, plus attachments Collateral: This loan is backed by the exportrelated inventory and income generated by the export sales financed with loan. The SBA also requires a personal guarantee for everyone with 20% or more ownership.

Export Working Capital The Bottom Line: This loan could be a good option if you run an export-focused business that needs short-term capital. Contact your local U.S. Export Assistance Center to learn more about the Export Working Capital Program and whether your business qualifies. For more information, click here.

International Trade Overview: The International Trade Loan Program offers term loans to businesses that plan to start or continue exporting. The main criterion is that the proceeds of the loan must enable the borrower to be in a better position to compete.

International Trade

International Trade Overview: The International Trade Loan Program offers term loans to businesses that plan to start or continue exporting. The main criterion is that the proceeds of the loan must enable the borrower to be in a better position to compete.

International Trade Maximum Loan Amount: $5 Million Interest Rates: Interest rates are negotiated between the borrower and the lender, subject to SBA caps. For loans greater than $50,000 and maturity in excess of seven years, lenders may charge up to 2.75 percent over prime rate. Turnaround time: 5-10 business days.

International Trade Forms: Standard 7a terms. Collateral: These loans are generally secured by a first lien position or first mortgage on the property or equipment financed by the loan. A second lien position on the property financed by the loan may be accepted, if the SBA determines the second lien position provides adequate collateral coverage.

International Trade The Bottom Line: This loan may appeal to businesses that are looking to expand their international trade, or have been negatively impacted by imports. Overall, however, this type of loan is fairly similar to the standard 7a loan. Contact your local U.S. Export Assistance Center to learn more about the Export Working Capital Program and whether your business qualifies. For more information, click here.

z Small/rural lender advantage

Small/rural lender advantage Overview: The Small/Rural Lender Advantage initiative is designed for small community and rural-based lenders that conventionally make very few SBA loans. The key features include:

Small/rural lender advantage • • • • The key features include: Streamlined loan application and process for SBA loans of $150,000 or less. A simplified SBA loan eligibility questionnaire to help small or occasional lenders meet SBA’s eligibility requirements. Loans centrally processed through SBA’s Standard 7(a) Loan Processing Center. Lenders can transmit applications via fax and eventually online.

Small/rural lender advantage Maximum Loan Amount: $350,000 Maturity: Standard 7a terms. Interest Rates: Standard 7a terms. Turnaround time: 3-5 business days. Forms: A one-page application for very small loans, with limited additional information required for loans above $50,000

Small/rural lender advantage Collateral: All available collateral (liquidation value) up to loan amount. The Bottom Line: This program may be a good option for people who wish to use small local lenders that do not conventionally issue many SBA-backed loans. For more information, click here.

Small Loan advantage Overview: This program is designed to expand access to capital for small businesses and entrepreneurs in underserved communities in order to help drive economic growth and job creation. Small Loan Advantage is structured to encourage existing SBA lenders to make lower-dollar loans, which often benefit businesses in underserved markets..

Small Loan advantage Maximum Loan Amount: $350,000 Maturity: Standard 7a terms. Interest Rates: Standard 7a terms. Turnaround time: Minutes through electronic submission. 5-10 business days. Forms: Small Loan Advantage features a two-page application for borrowers.

Small Loan advantage Collateral: Standard 7a terms. The Bottom Line: The Small Loan Advantage program is an excellent option for businesses looking for small loans and quick approval. The pre-approval process enables for near instant approval from the SBA. For more information, click here.

Community Advantage (Pilot Program) Overview: This pilot program is aimed at increasing the number of loans in traditionally underserved communities by allowing mission-driven organization to make SBA loans. These potential new SBA lending partners include Community Development Financial Institutions, Certified Development Companies and nonprofit microlending intermediaries..

Community Advantage (Pilot Program) Maximum Loan Amount: $250,000 Maturity: Standard 7a terms. Interest Rates: Standard 7a terms. Turnaround time: 5-10 business days. Forms: Community Advantage features streamlined paperwork, with a two-page application for borrowers.

Community Advantage (Pilot Program) Collateral: Standard 7a terms. The Bottom Line: This pilot program is very similar to the Small Loan Advantage program, but it opens up the possibility of borrowing from a more mission-oriented organizations.. For more information, click here. For a list of Community Advantage approved lenders, click here.

Final Thoughts There are many special 7a loan programs that might be relevant to your business needs. We encourage you to contact some local lenders to discuss your various options.

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