Programs

The major concern for today's small business owners is access to capital and credit. The Small Business Administration and the United States Department of Agriculture loan guarantee programs provide a key source of financing for viable small businesses that have real potential, but cannot qualify for loans from traditional sources. SBA and USDA loan guarantees, provided through private lenders and nonprofit lending institutions, give small business owners access to the same kinds of reasonably priced, long-term financing available to large businesses by virtue of their size and economic clout. Financing programs provided by SBA & USDA vary according to a borrower's financial need. These loans are made by private lenders and are guaranteed, based on the program, between 75% and 85%. There are three players in a guaranteed loan - the small business borrower, the private lender, and the federal agency issuing the guarantee.

SBA 7(a)

Purpose: Acquisition, expansion, construction, recapitalization, refinance, business buyout, working capital, and machinery & equipment purchase.

Loan Amount: Up to $2,000,000.00 with 85% guarantee for loans $150,000.00.

Interest Rate: At Bank's discretion with a maximum of Prime + 2.75% over WSJ prime.

Term: Up to 25 years, for real estate; 10 years for working capital, useful life of equipment.

Prepayment Penalty: Prepayment penalty of 5%, 3%, 1% during first three years of loan respectively on loans with 15 year or more maturity.

Fee: Fees will vary from year to year depending on legislation authorizing SBA funding.

Collateral Position: Normally first position on assets being purchased with loan proceeds. Other business and/or personal assets will be required if the loan is not adequately secured. Personal guarantee of all principals.

Eligible Businesses: Must be a for profit business. Financial Institutions, gambling establishments, private clubs and real estate speculation are ineligible.

Financial Data: Three years of projections for existing business or start-ups. Start-ups should present first year projections by month.
Personal: Three years of tax returns and financial statements of owners with 20% or more ownership.

USDA - B&I

Purpose: Acquisition, expansion, construction, recapitalization, refinance, business buyout, working capital, and machinery & equipment purchase.

Loan Amount: Up to $10,000,000.00 with 85% guarantee for loans $150,000.00.

Interest Rate: At Bank's discretion.

Term: Up to 25 years, for real estate; Working capital & equipment between 7 and 10 years.

Prepayment Penalty: At the bank's discretion.

Fee: Collateral 2% of the guaranteed amount payable to USDA

Collateral Position: Normally first position on assets being purchased or refinanced with loan proceeds. Assets outside the business may be required to adequately secure the loan. Personal guarantee of all principals.

Eligible Businesses: For profit business. (Financial Institutions, gambling establishments speculative real estate and golf courses are not eligible)

Financial Data: Business - Current Balance Sheet with Profit & Loss Most recent five years of returns
Personal - Three years tax returns on all owners Current personal financial statement on all owners.
Projections - Three years, start-up must provide a month-by-month cash flow statement.

SBA 504 Program

Purpose: Job Creation through purchase of fixed assets.

Loan Amount: Total Project Cost of $2,000,000 - $3,000,000

Interim Financing: Provided by Participating Bank

Permanent Financing: 50% of Project Cost funded by Participating Bank.

Term: Participating Bank must have a term of at least half of TBDC/SBA term.
TBDC/SBA term 10 or 20 years depending on assets acquired.

Interest Rate: Normal Bank rate on Participating Bank's 50% portion.

Fees: Participating Bank pays one time 1/2% fee to SBA on their funded portion of the loan.
Borrower pays required SBA fees which can be financed in SBA portion of loan.

Collateral: Participating Bank has 1st position an all collateral (50% LTV).
TBDC/SBA has 2nd position on all collateral.
Personal Guarantees of Principals

Special Programs