SBA Community Loans – Improve Your Business In Several Steps

SBA Community Loans - Improve Your Business In Several StepsCommunity advantage loan is a loan program released by the U.S. Small Business Administration (SBA) to suit the credit, management, and technical assistance requirements  intended for small businesses in underdeveloped markets. This program offers mission-oriented lenders, primarily nonprofit financial intermediaries oriented on economic development, access to loan guaranties for loans of $250,000 or less.

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SBA’s goals for CA are to:

  • level up access to loans for small businesses situated in underserved regions;
  • build out points of access to the SBA loan program to non-traditional, mission-oriented lenders to become its part;
  • ensure Management and Technical Assistance (M&TA) to small businesses as required;
  • monitor portfolio risk.

Is there a limit to SBA loans?

The maximum loan amount is $5,000,000. The total SBA for any client may not exceed $3,750,000. The loan term is up to 25 years for real estate acquisition or construction. Most other SBA loans are limited to 10 years.

Can I apply for SBA loan twice?

There’s no limit to how many times you can apply for an SBA loan. The only limitation is for special long programs, like the Paycheck Protection Program (PPP). Borrowers can only draw twice from the PPP loans at this time.

SBA Community Loan program details

  • Loan amount: up to $250,000.
  • SBA-guarantee: as much as 85% of the loan amount for $150,000 or less, and as much as 75% for loans of $150,001.
  • Interest rates: 7% to 9%.
  • Repayment terms: maximum of 10 years or the useful life of the equipment, maximum 10 years for working capital, and maximum 25 years for real estate.
  • Fees: loan guarantee fee that can range from 0.25% to 3.0% based on the loan amount and repayment terms.
  • Eligible loan purposes: working capital, real estate purchase, renovations, equipment purchases, debt refinancing, and more.

How to qualify for a loan?

Overall, there are the following qualifications to apply for a loan for your small business:

  • profit-based business in a legit industry serving the US citizens;
  • relate to a “small business” according to the definition of SBA;
  • have no other classic financing options;
  • have invested some of your own time and money into the business;
  • be capable to be a reliable client and a probability to pay the loan back;
  • have not previously defaulted on any government-guaranteed business loans.