south dakota district office 2329 n. career ave. sioux falls, south dakota 57107 (605) 330-4243...
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South Dakota District Office
2329 N. Career Ave.
Sioux Falls, South Dakota 57107
(605) 330-4243 Ext.39
www.sba.gov/for-lenders
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Access to Capital
• Grants NOT available from SBA
• SBA offers loan guarantees to lenders– Partial refund for failed loan– Lender obtains guarantee
• Lenders handle all loan transactions– Application– Approval– Disbursement– Servicing– Collection
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Access to Capital
So Why Go With an SBA Guarantee??
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Access to Capital
• Not everyone needs an SBA Guarantee
• SBA Guaranteed Loan Program provides an alternative
• If risk is too high - lender comes to SBA– SBA Guarantee reduces lender risk
• Start-ups• Insufficient collateral• Non-standard repayment terms
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7(a) Program
• Use of Proceeds– Working capital– Inventory– Lines of credit– Expansion / renovation– Leasehold improvements– Land or buildings– Furniture / fixtures / equipment– Refinance debt for compelling reasons
Community Advantage
Pilot
ProgramSouth Dakota District Office
2/9/11-V1.0
Community Advantage
New 7(a) Pilot Program (3-year duration)
To meet the capital access needs of small businesses in underserved markets
To increase the points of access for underserved markets
To provide mission-oriented lenders access to 7(a) loan guarantees for loans of $250,000 or less
2/9/11-V1.0
Community Advantage
Target: Primarily non-profit financial intermediaries
focused on economic development in underserved markets
Underserved markets include:Low-to-Moderate Income (LMI) communities
Empowerment Zones
Enterprise Communities
HUBZones
Start-up businesses (in business no more than two years)
Veteran-owned businesses (including Patriot Express eligible)
More than 50% of full time workforce is low-income or resides in LMI census tracts.
2/9/11-V1.0
Community Advantage
Eligible Lenders• SBA-authorized Certified Development Companies (CDC)• SBA-authorized Microloan Intermediaries• Non-Federally Regulated Community Development
Financial Institutions
To participate in the program eligible applicants will be evaluated on their organization’s expertise, capacity and infrastructure
2/9/11-V1.0
Community Advantage Loans
Basic Loan Terms and Conditions are the same as standard 7(a) loan (see SOP 50 10 5, Subpart B, Chapter 2 as amended), with the following exceptions:
• $250,000 maximum loan size• Prime + 4% maximum interest rate• Revolving lines are not allowed• Management and Technical Assistant will be encouraged when
appropriate– Information will be collected on each loan at application
2/9/11-V1.0
Visit us at www.sba.gov 11Visit us at www.sba.gov 11