SBA 7(a) Working Capital Pilot Program Starts on August 1st

July 15, 2024

Delaney Sexton
Contributing Editor

SBA 7(a) Working Capital Pilot Program Starts on August 1^st

In the Federal Register, SBA’s 7(a) Working Capital Pilot (WCP) Program was introduced, and SBA is currently accepting comments on the new program until August 14, 2024. The program itself goes into effect on August 1, 2024, and will run through July 31, 2027.

A detailed 7(a) Working Capital Pilot Program Guide will be published on SBA’s website. SBA will be uploading the WCP Upfront Fee on their website later, though it should look similar to the Export Working Capital Program’s Upfront Fee.

The new program provides guaranteed lines of credit through asset-based and transaction-based lines of credit. Loans of $150,000 or less have an 85% guaranty, and loans above $150,000 have a 75% guaranty. WCP loans can be approved for up to $5 million and can be used to support domestic and international transactions.

Lenders are allowed to use the Secured Overnight Financing Rate (SOFR) plus 3% as a base interest rate. They can also use Prime and SBA’s Optional Peg Rate. Lenders can continue to use their established in-house SOFR reference rates of 30 days or less since they correlate with the daily SOFR rate.

You can find the Federal Register notice and submit comments here.