7 (a) Loan Guaranty

• SBA’s primary and most flexible loan used for:
  • Working capital
  • Machinery
  • Equipment
  • Furniture and Fixtures
  • Land and Building
  • Leasehold Improvements
  • Debt Refinancing
• Maturity is 10 years for working capital and 25 years for fixed assets
• SBA does not fully guarantee the loan – the lender and the SBA share the risk
• Types of SBA Loans:
  • Express Programs
    • Offer streamlined and fast loan procedures for particular groups of borrowers
      • SBA Express: 36 hour time turnaround (See below)
      • Community Express: Helps individuals in underserved (See Below) communities, HUB Zones, CRA Areas, $25,000 or less
    • Export Loan Programs
      • Export Express – helps develop your export market and provides streamlined method to help you get financing up to $250,000. It can be used for any export development activity including:
        • Standby letter of credit when required as a big bond, performance bond or advanced payment guarantee
        • Participation in a foreign tradeshow
        • Translation of product brochures exported overseas
        • General lines of credit for export purposes
        • Service contracts for buyers outside the U.S.
        • Transaction – specific financing needs associated with completing orders
        • Purchase of real estate and equipment used for exporting business
        • Providing term loans to enable small business concerns to develop foreign markets, including export trading companies and management companies
• Acquisition, construction, renovation, modernization, improvement or expansion of productive facilities or equipment to be used in the U.S. in the production of goods or services for export.
• The SBA will guarantee up to $500,000 of any one or multiple loans according to the percentage of guarantees. A maximum loan size of $2,000,000 has been established. There is no theoretical minimum.
• The SBA is temporarily eliminating upfront guaranty fees contingent on the availability of funds.
• Both fixed and variable interest rates are available. 2.25% plus prime for loans less than 7 tears. 2.75% plus prime for loans 7 years or greater.
• Guarantee fees are paid by the lender and may be passed on to the borrower
  • The fee is based on the maturity and amount of the loan
  • On a loan with a maturity of one year or less, the fee is .25% of the guaranteed portion. 
  • Loans of more than one year and the total amount is $150,000 or less have a 2% fee of the amount guaranteed
  • The lender CAN retain 25% of this amount
  • Loan amounts of $150,000 up to and including $700,000 have a fee of 3% of the guaranteed amount
  • More than $700,000 has a fee of 3.5% of the guaranteed amount.
• The SBA is temporarily eliminating upfront guaranty fees contingent on the availability of funds.