What is the SBA Working Capital Pilot Program?
The 7(a) Loan Program is SBA’s primary program for helping small businesses with financing guaranteed for a variety of general business purposes.
USES OF PROCEEDS·
Working capital
AMOUNTS·
Minimum- $250,000
Maximum – $5 Million
MATURITY·
Up to 60 Months
Interest Rates
$50,000 or less: cannot exceed base rate + 6.5%
$50,001 – $250,000: cannot exceed base rate + 6.0%
$250,001 – $350,000: cannot exceed base rate + 4.5%
$350,001 and greater: cannot exceed base rate + 3.0%
Eligibility
Have a history of 12 full months of operations prior to filing an application
If supporting an acquisition – the acquiring borrower must have a history of 12 full months of operations prior to filing an application
Can produce timely and accurate financial statements, accounts receivable and accounts payable agings, and inventory reports
The lender must obtain updated financial statements on the borrower annually and perform a full credit analysis as part of any renewal
Asset Based Lending
The 7(a) WCP is positioned to help small businesses access the working capital they need to support and grow their business
Using a 7(a) WCP, small businesses can efficiently borrow against their accounts receivable and inventory
The 7(a) WCP will also help transition borrowers from SBA Express loans into a larger working capital facility to support their growth
Transaction Based Lending
The 7(a) WCP can support project financing, allowing a borrower to access the working capital at an earlier point than they would under a traditional line of credit
Through this unique financing method, the 7(a) WCP can enable a borrower to access funding earlier in their sales cycle
With the support of a Transaction Based 7(a) WCP, small businesses can take on transformational opportunities with the confidence they can cover all related costs
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Paul is NOT a loan broker but works for a financial institution that is a direct lender
