February 7, 2017
By Bob Coleman
Editor, SBA Hot Topic Tuesday
SBA Hot Topic Tuesday — Are you an SBA CAPLINE Lender?
Last week, I received an email asking who are the CAPLINE lenders out there?
I went to the data base and discovered lenders only approved 459 SBA 7(a) CAPLINE loans totaling $331 million last fiscal year.
The data doesn’t break out the lenders, so if you want to be identified as a CAPLINE 7(a) lender, please respond to the poll at the bottom of this email.
As a refresher, there are four short-term working-capital loan programs for small businesses under the CAPLines umbrella:
These are advances against anticipated inventory and accounts receivable help during peak seasons when businesses experience seasonal sales fluctuations. Can be revolving or non-revolving.
Finances the direct labor and material cost associated with performing assignable contract(s). Can be revolving or non-revolving.
If you are a small general contractor or builder constructing or renovating commercial or residential buildings, this can finance direct labor-and material costs. The building project serves as the collateral, and loans can be revolving or non-revolving.
Standard Asset-Based Line
This is an asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth, recurring and/or short-term needs. Repayment comes from converting short-term assets into cash, which is remitted to the lender. Businesses continually draw from this line of credit, based on existing assets, and repay as their cash cycle dictates. This line generally is used by businesses that provide credit to other businesses. Because these loans require continual servicing and monitoring of collateral, additional fees may be charged by the lender.
Maximum Loan Amounts
The maximum loan amount is $5 million and the program mirrors SBA 7(a) guaranty amounts of 85% for loans less than $150,000 and 75% for loans over $150,000.
NOTE: Lenders may charge an annual reasonable extraordinary servicing fee in excess of 2%.
Please Answer this quick poll question.
Does your institution offer CAPLINE financing?
No, but we may in the future
I don’t know
If you are accepting referrals please offer contact information to be published next week.