How It Works
Once a small business borrower meets the lender's requirements for credit, the lender may request a LowDoc guaranty from the SBA. It's a quick, two-step process:
- The borrower completes the front of the SBA's one-page application, and the lender completes the back.
- The lender submits a complete application to the SBA and receives an answer within 36 hours.
The New SBALowDoc allows lenders to take advantage of electronic loan processing.
Interest Rates
Interest rates can be negotiated between the borrower and lender, may be fixed or variable, are tied to the prime rate (as published in the Wall Street Journal) , and may not exceed the following SBA maximums:
- 2.25 percent over prime for loans of less than seven years, and
- 2.75 percent over prime for loans of seven years or longer.
Loans under $50,000 may be subject to slightly higher rates.
Collatera
- To secure the loan, the borrower must pledge available assets; generally, loans are not declined when inadequate collateral is the only unfavorable factor.
- Personal guaranties of the principals are required.
Maturity
Length of time for repayment depends on -
- ability to repay, and
- the use of the loan proceeds.
Maturity generally is five to 10 years. For fixed-asset loans it can be up to 25 years.
Eligibility
A business is generally eligible for the New SBALowDoc if
- the purpose of the loan is to start or grow a business;
- the existing business has average annual sales for the preceding three years not exceeding $5 million, and the business employs no more than 100 people, including affiliates;
- the business and its owners have good credit; and
- the business owners are of good character.
For More Information
SBA offices are located in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam. For the office nearest you, look under "U.S. Government" in your telephone directory, or contact:
- SBA Answer Desk: 1-800 U ASK SBA
- Fax: 202-205-7064
- TDD: 704-344-6640
- Your rights to regulatory fairness:1-888-REG-FAIR
- OnLine Electronic Bulletin Board (modem and computer required)
1-800-697-4636 (limited access)
1-900-463-4636 (full access)
202-401-9600 (D.C. metro area)
- Internet
SBA Affiliates
Inquire at your local SBA office for the location
nearest you.
- BICs - Business Information Centers
- TBICs - Tribal Business Information Centers
- OSCSs - One Stop Capital Shops
- SCORE - Service Corps of Retired Executives
- SBDCs - Small Business Development Centers
- USEACs - U.S. Export Assistance Centers
- WBCs - Women's Business Centers
SBA Publications
- The Facts About... SBA Publications - a listing of free SBA publications
Did you know that in fiscal 1998 the SBA-
- maintained a guaranteed loan portfolio of more than $40 billion in loans to 491,000 small businesses that otherwise would not have had such access to capital?
- backed more than 47,100 loans totaling $10.8 billion to America's small businesses?
- made a record 3,456 investments worth $3.24 billion through its venture capital program?
- provided more than 30,000 loans totaling over $728 million to disaster victims for residential, personal-property and business losses?
- extended management and technical assistance to nearly 830,000 small businesses through its 12,400 Service Corps of Retired Executives volunteers and 1,000 small business development center locations?
- helped 6,000 small disadvantaged businesses obtain $5.9 billion in federal contracts?
Did you know that America's 23 million small businesses
- employ more than 50 percent of the private workforce?
- generate more than half of the nation's gross domestic product?
- are the principal source of new jobs?
All of the SBA's programs and services are provided to the public on a nondiscriminatory basis.
SBA No. CO-0039 (09/99)
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