DIR's Supplier Diversity Information Resource Guide 20, Jan 2012 | Page 27

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

Procurement Programs

Based Line has a maximum loan amount of $200,000.
Although most small businesses are eligible for SBA loans, some types of businesses are ineligible and a
case-by-case determination must be made by the Agency.
Each of the five lines of credit has a maturity of up to five (5) years, but, because each is tailored to an
individual business's needs, a shorter initial maturity may be established. CAPLines funds can be used as
needed throughout the term of the loan to purchase assets, as long as sufficient time is allowed to convert
the assets into cash at maturity.
Holders of at least 20% ownership in the business are generally required to guaranty the loan. Although
inadequate collateral will not be the sole reason for denial of a loan request, the nature and value of that
collateral does factor into the credit decision.
www.sba.gov/financing/loanprog/caplines.html
Certified Lenders Program (CLP)
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The Certified Lenders Program (CLP) is designed to provide expeditious service on loan applications receivedmati
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from lenders who have a successful SBA lending track record and a thorough understanding of SBA policiesn
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and procedures. CLP lenders are expected to perform a complete analysis of the application and, in return,
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SBA promises a fast loan decision. SBA reviews the lender's credit analysis rather than conductsea.csecond
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analysis. SBA still makes the final credit and eligibility decision but, by completing a credit esou
review instead of
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an independently conducting analysis, SBA strives for 3-day (working days) turn aroundyIino arriving at its
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decision.
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The key aspect of CLP is the greater utilization of the credit knowledge of thet Ilender's loan officers to
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shorten SBA's loan processing time. SBA still makes an independent determination as to whether the applico
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cant can repay the loan from the profits of the business, but under CLP, ethe lenders work is reviewed rather
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than completely double-checked.
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To become a Certified Lender, an SBA field office may nominate a Lender. A Lender may also request a field
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office to consider it for CLP status. SBA district directors , may approve and renew a Lender's CLP status.
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If the district director does not approve a request forrc
u CLP status, the Lender may appeal to the Associate
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Administrator of Financial Assistance, whose decision will be final. If SBA grants CLP status, it applies only in
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the field office that processed the CLP designation. A CLP Lender must execute a Supplemental Guarantee
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Agreement that will specify a term notsitto exceed two years.
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www.sba.gov/financing/lendinvest/clp.html
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Preferred Lenders Programy (PLP)
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The Preferred Lendersny
a Program (PLP) is another step in SBA's process of "streamlining" the procedures
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necessary to provide financial assistance to the small business community. Under PLP, SBA delegates loan
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approval, closing, and most servicing and liquidation authority and responsibility to these carefully selected
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lenders. p.ro(Lenders new to SBA should first read about becoming an SBA Lender) SBA will continue to check
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loant beligibility criteria under this program.
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mPLP lenders are nominated based on their historical record with the Agency. They must have demonstrated a
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proficiency in processing and servicing SBA-guaranteed loans. The credit criteria for PLP loans are the same
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as that for the CLP and/or the Regular 7(a) program. In the event of payment default by the borrower and the
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need for enforced collections, the PLP lender agrees to liquidate all business assets before asking SBA to
honor its guaranty.
To become a Preferred Lender, an SBA field office may nominate a Lender. A Lender may also request a field
office to consi der it for PLP status. The SBA field office will forward its recommendation to an SBA centralized loan processing center which will submit its recommendation and supporting documentation to the
Associate Administrator of Financial Assistance (AA/FA) for final decision.
If the Lender is approved, the AA/FA will designate the area in which it can make PLP loans. Before it can
operate as a PLP Lender, the approved Lender must execute a Supplemental Guarantee Agreement, which
will specify a term not to exceed two years. When a PLP's Supplemental Guarantee Agreement expires, SBA
may recertify it as a PLP Lender for an additional term not to exceed two years. Prior to recertification, SBA
will review a PLP Lender's loans, policies and procedures. The recertification decision of the AA/FA is final.
A PLP Lender may request an expansion of the territory in which it can process PLP loans by submitting its
2012 Supplier Diversity Information Resource Guide

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