To provide guaranteed loans to small businesses which
are unable to obtain financing in the private credit marketplace, but can
demonstrate an ability to repay loans granted. Guaranteed loans are made
available to low-income business owners or businesses located in areas of high
unemployment, nonprofit sheltered workshops and other similar organizations
which produce goods or services; to small businesses being established,
acquired or owned by handicapped individuals; and enable small businesses to
manufacture, design, market, install, or service specific energy measures. The
SBA's 7(a) lending authority includes: 1) the Low Documentation Loan Program
(Low Doc); 2) the Cap Line Program; 3) FA$ TRAK Program, formerly the Small
Loan Express; 4) the Women's Prequalification Program; and 5) Minority
Prequalification Program.
TYPES OF ASSISTANCE:
Guaranteed/Insured Loans. Place Cursor Here for Definition
USES AND USE RESTRICTIONS:
To construct, expand, or convert facilities; to purchase building equipment or
materials; and for working capital. Excludes gambling establishments,
nonprofit enterprises, speculators in property, lending or investment
enterprises, and financing of real property held for investment; also excludes
funds to indiscriminately relocate the business. Funds must not otherwise be
available on reasonable terms, nor used to pay off a loan to an unsecured
creditor who is in a position to sustain loss.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: A small business is eligible,
which is independently owned and operated and not dominant in its field.
Generally, SBA size standards for manufacturers range from 500 to 1,500
employees, depending on the industry; for wholesalers up to 500 employees is
allowed, retailers and service concerns having revenues of $3,500,000 and in
certain cases up to $21,500,000, may be considered small; and depending upon
the type of industry, agricultural enterprises have size standards from
$500,000 to $3,500,000 in annual receipts.
Beneficiary Eligibility: Small businesses,
including those owned by low-income and handicapped individuals, or located in
high unemployment areas.
Credentials/Documentation: Statement of personal
history, personal financial statement, company financial statements, summary
of collateral and a resume. Loan must be of such sound value or so secured as
to reasonably assure repayment.
Pre-application Coordination: None. This program is
excluded from coverage under E.O. 12372.
Application Procedure: Applications are filed by
the participating lender in the field office serving the territory in which
the applicant's business is located. Where the participating lender is in
another territory, applications may be accepted and processed by the field
office serving that territory, provided there is mutual agreement between the
two field offices involved. (See listing of field offices in Appendix IV of
the Catalog.)
Award Procedure: Applicant is notified by
authorization letter from the District SBA Office, or participating bank.
Deadlines: None.
Range of Approval/Disapproval Time: From 1 to 10
days from date of application acceptance, depending on type of loan and type
of lender program.
Appeals: If a reconsideration is requested within
6 months after decline or withdrawal, no new application is required.
Renewals: Not applicable.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: Not applicable.
Length and Time Phasing of Assistance: Not
applicable.
POST ASSISTANCE REQUIREMENTS:
Reports: Periodic financial statement.
Audits: When necessary, on a case-by-case basis.
Records: Adequate accounting system.
FINANCIAL INFORMATION:
Account Identification: 73-1154-0-1-376.
Obligations: (Guaranteed Loans) FY 01
$8,998,224,000; FY 02 est $10,000,000,000; and FY 03 est $9,000,000,000.
Range and Average of Financial Assistance:
Guarantee Loans: Up to $500,000. Average: $226,521.
In fiscal year 2001, 38,974 loans were Guaranteed for $9,000,000,000.
REGULATIONS, GUIDELINES, AND LITERATURE:
"SBA Business Loans from the SBA," OPC-6.
INFORMATION CONTACTS:
Regional or Local Office: Initial contact should be
with the District Offices listed in Appendix IV of the Catalog.
Headquarters Office: Director, Loan Policy and
Procedures Branch, Small Business Administration, 409 Third Street, SW.,
Washington, DC 20416. Telephone: (202) 205-6570.
