SBA Loan Programs
SBA loans provide short and long-term financing designed for small businesses with 500 employees or less. Balloon payments, prepayment penalties, application fees or points are not permitted with SBA loans. SBA loans may be used to expand or renovate facilities, purchase machinery or equipment, finance receivables, provide working capital, finance seasonal lines of credit, refinance existing debt, construct commercial buildings and purchase land or existing buildings.
The length of time for repayment of an SBA loan depends on the use of the proceeds and the ability of your business to repay. Terms are usually up to 7 years for working capital, 10 years for equipment and up to 25 years for a real estate purchase or renovation.
In order to secure an SBA loan, sufficient collateral or assets must be pledged. Personal guaranties are also required from all the principal owners of the business. In order to be considered for an SBA loan, United Community Bank will need the following information from you:
- Purpose of the loan
- History of your business
- Financial statements for the past three years (for existing businesses only)
- Personal tax returns for the past three years
- Schedule of term debts (for existing businesses only)
- Aging of accounts receivable and payable (for existing businesses only)
- Projected opening day balance sheet (new businesses only)
- Lease details (if applicable)
- Amount of investment in the business by the owner(s)
- Projections of income, expenses and cash flow
- Signed personal financial statements
- Personal Resume(s)
A few of the SBA's financial assistance programs include:
- 7(A) Loan Guaranty Program - This is the primary loan program for the SBA. It reduces the risk to lenders by guaranteeing major portions of loans made to small businesses. This program enables the lenders to provide financing to small businesses on terms otherwise unavailable. The eligibility requirements and credit criteria of the program are very broad in order to accommodate a wide range of financing needs.
- CAP Lines Program - This specialized program helps small businesses meet their short-term and cyclical needs. There are five short term loans (less than a year) under this program. Seasonal Line, Builders Line, Standard Asset-Based Line and Small Asset-Based Line. A CAP Lines loan can be for any dollar amount (except the Small Asset-Based Line), and the SBA will guarantee 75% up to $750,000 and 80% on loans of $100,000 or less.
- 504 Certified Development Company Program - This program enables growing businesses to secure long-term, fixed-rate financing for major fixed assets, such as land or buildings. A certified development company (CDC) is a non-profit corporation set up to contribute to the economic development of its community or region. CDCs work with private-sector lenders to provide larger loans to small businesses through the use of SBA-guaranteed debentures.
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