FEDERAL AGENCY:

SMALL BUSINESS ADMINISTRATION

AUTHORIZATION:

Small Business Act of 1953, Section 7(a), as amended, Public Law 97-35.

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. Place Cursor Here for Definition

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.

Pre-application 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:   From 1 to 10 days from date of application acceptance, depending on type of loan and type of lender program.

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.

FINANCIAL INFORMATION:

Account Identification:   73-1154-0-1-376.

Obligations:   (Guaranteed Loans) FY 01 $8,998,224,000; FY 02 est $10,000,000,000; and FY 03 est $9,000,000,000.

Range and Average of Financial Assistance:  
Additional information is available on SBA's website at www.sba.gov/7a-loan-program.

In fiscal year 2001, 38,974 loans were Guaranteed for $9,000,000,000.

REGULATIONS, GUIDELINES, AND LITERATURE:

"SBA Business Loans from the SBA," OPC-6.

INFORMATION CONTACTS:

Regional or Local Office:  
See Regional Agency Offices. Initial contact should be with the local District Offices (https://www.sba.gov/tools/local-assistance/districtoffices) listed in Appendix IV of the Catalog of Federal Domestic Assistance under Small Business Administration.

Headquarters Office:   John Wade 409 3rd St., SW 8th Floor, Washington, District of Columbia 20416 Email: john.wade@sba.gov Phone: 202-205-3647

Web Site Address:  
http://www.sba.gov/7a-loan-program

EXAMPLES OF FUNDED PROJECTS:

Not applicable.

CRITERIA FOR SELECTING PROPOSALS:

Not applicable.