Small Business Loans (59.012)
Program
59.012 Small Business Loans
Federal Agency
SMALL BUSINESS ADMINISTRATION
Authorization
Small Business Act of 1953, Section 7(a), as amended, Public Law 97-35.
Program Number
59.012
Last Known Status
Active
Objectives
To provide guaranteed loans to small businesses which are unable to obtain financing in the private credit marketplace, but can demonstrate an ability to repay loans granted. Guaranteed loans are made available to low-income business owners or businesses located in areas of high unemployment, nonprofit sheltered workshops and other similar organizations which produce goods or services; to small businesses being established, acquired or owned by handicapped individuals; and enable small businesses to manufacture, design, market, install, or service specific energy measures. The SBA's 7(a) lending authority includes: 1) the Low Documentation Loan Program (Low Doc); 2) the Cap Line Program; 3) FA$ TRAK Program, formerly the Small Loan Express; 4) the Women's Prequalification Program; and 5) Minority Prequalification Program.
Types of Assistance
Guaranteed/Insured Loans (including Immediate Participation Loans).
Uses and Use Restrictions
To construct, expand, or convert facilities; to purchase building equipment or materials; and for working capital. Excludes gambling establishments, nonprofit enterprises, speculators in property, lending or investment enterprises, and financing of real property held for investment; also excludes funds to indiscriminately relocate the business. Funds must not otherwise be available on reasonable terms, nor used to pay off a loan to an unsecured creditor who is in a position to sustain loss.
Eligibility Requirements
Applicant Eligibility
A small business is eligible, which is independently owned and operated and not dominant in its field. Generally, SBA size standards for manufacturers range from 500 to 1,500 employees, depending on the industry; for wholesalers up to 500 employees is allowed, retailers and service concerns having revenues of $3,500,000 and in certain cases up to $21,500,000, may be considered small; and depending upon the type of industry, agricultural enterprises have size standards from $500,000 to $3,500,000 in annual receipts.
Beneficiary Eligibility
Small businesses, including those owned by low-income and handicapped individuals, or located in high unemployment areas.
Credentials/Documentation
Statement of personal history, personal financial statement, company financial statements, summary of collateral and a resume. Loan must be of such sound value or so secured as to reasonably assure repayment.
Application and Award Process
Preapplication Coordination
None. This program is excluded from coverage under E.O. 12372.
Application Procedure
Applications are filed by the participating lender in the field office serving the territory in which the applicant's business is located. Where the participating lender is in another territory, applications may be accepted and processed by the field office serving that territory, provided there is mutual agreement between the two field offices involved. (See listing of field offices in Appendix IV of the Catalog.)
Award Procedure
Applicant is notified by authorization letter from the District SBA Office, or participating bank.
Deadlines
None.
Range of Approval/Disapproval Time
Appeals
If a reconsideration is requested within 6 months after decline or withdrawal, no new application is required.
Renewals
Not applicable.
Assistance Considerations
Formula and Matching Requirements
Not applicable.
Length and Time Phasing of Assistance
Not applicable.
Post Assistance Requirements
Reports
Periodic financial statement.
Audits
When necessary, on a case-by-case basis.
Records
Adequate accounting system.
Program Accomplishments
In fiscal year 2001, 38,974 loans were Guaranteed for $9,000,000,000.
Financial Information
Account Identification
73-1154-0-1-376.
Obligations
(Guaranteed Loans) FY 02 $8,998,224,000; FY 03 est $10,000,000,000; and FY 04 est $9,000,000,000.
Range and Average of Financial Assistance
Guarantee Loans: Up to $500,000. Average: $226,521.
Regulations, Guidelines and Literature
"SBA Business Loans from the SBA," OPC-6.
Related Programs
11.800, Minority Business Development Centers; 15.124, Indian Loans_Economic Development.
Information Contacts
Regional or Local Office
Initial contact should be with the District Offices listed in Appendix IV of the Catalog.
Headquarters Office
Director, Loan Policy and Procedures Branch, Small Business Administration, 409 Third Street, SW., Washington, DC 20416. Telephone: (202) 205-6570.
Web Site Address
Examples of Funded Projects
Not applicable.
Criteria for Selecting Proposals
Not applicable.
