DIR's Supplier Diversity Information Resource Guide 20, Jan 2012 | Page 22

COPYRIGHT 2012, DIVERSITY
Finance, Investment and Procurement Programs INFORMATION RESOURCES, MINNEAPOLIS, MN

FINANCE, INVESTMENT AND PROCUREMENT PROGRAMS
Basic 7(a) Loan Guaranty
Serves as the SBA's primary business loan program to help qualified small businesses obtain financing when
they might not be eligible for business loans through normal lending channels. It is also the agency's most
flexible business loan program, since financing under this program can be guaranteed for a variety of general
business purposes.
Loan proceeds can be used for most sound business purposes including working capital, machinery and
equipment, furniture and fixtures, land and building (including purchase, renovation and new construction),
leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for
working capital and generally up to 25 years for fixed assets. SBA offers multiple variations of the basic 7(a)
loan program to accommodate targeted needs.
CUSTOMER: Start-up and existing small businesses, commercial lending institutions
DELIVERED THROUGH: Commercial lending institutions
www.sba.gov/financing/sbaloan/7a.html
Certified Development Company (CDC), a 504 Loan Program
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Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equiprce
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ment for expansion or modernization. Typically a 504 project includes a loan secured from a private-sector
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lender with a senior lien, a loan secured from a CDC (funded by a 100 percent SBA-guaranteedtydebenture)
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with a junior lien covering up to 40 percent of the total cost, and a contribution of at least D
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CUSTOMER: Small businesses requiring “brick and mortar” financing
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DELIVERED THROUGH: Certified development companies (private, nonprofit lcorporations set up to contribea
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www.sba.gov/financing/sbaloan/cdc504.html
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Microloan, a 7(m) Loan Program
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Provides short-term loans of up to $35,000 to small businesses and not-for-profit child-care centers for
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working capital or the purchase of inventory, supplies,o furniture, fixtures, machinery and/or equipment.
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Proceeds cannot be used to pay existing debts orInto purchase real estate. The SBA makes or guarantees a
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management and technical assistance. rThe SBA does not guarantee the loans. The microloan program is
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available in selected locations in most states.
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CUSTOMER: Small businesses y ent not-for-profit child-care centers needing small-scale financing and techniand
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Specially designated intermediary lenders (nonprofit organizations with experience
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in lending and in technical assistance)
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www.sba.gov/financing/sbaloan/microloans.html
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Loan oPrequalification
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Allows a business applicant to have their loan applications for $250,000 or less analyzed and potentially
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is sanctioned by the SBA before they are taken to lenders for consideration. The program focuses on the
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applicant's character, credit, experience and reliability rather than assets. An SBA-designated intermediary
works with the business owner to review and strengthen the loan application. The review is based on key
financial ratios, credit and business history, and the loan-request terms. The SBA's Office of Field Operations
and SBA district offices administer the program.
CUSTOMER: Designated small businesses
DELIVERED THROUGH: Intermediaries operating in specific geographic areas
www.sba.gov/financing/sbaloan/prequalification.html
Export Working Capital
The Export Working Capital Program (EWCP) was designed to provide short-term working capital to exporters. The SBA's Export Working Capital Program (EWCP) supports export financing to small businesses when
that financing is not otherwise available on reasonable terms. The program encourages lenders to offer

SECTION 2

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2012 Supplier Diversity Information Resource Guide

CONTENT MAY BE EXPIRED; SEE WWW.DIVERSITYINFORESOURCES.COM FOR LATEST VERSION

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