Loan Programs
This class of loans may be used for a variety of reasons, including the purchase of land,
buildings, equipment, machinery, supplies, or materials. It may also be used for long-term
working capital (paying accounts payable or the purchase of inventory). It may even be used to
purchase an existing business. This class of loans cannot, however, be used to refinance existing
debt, to pay delinquent taxes, or to change business ownership.
• Special-purpose loans program. These loans are designed to assist small businesses for specific
purposes. They have been used to help small businesses purchase and incorporate pollution control
systems, develop employee stock ownership plans, and aid companies negatively impacted by the North
American Free Trade Agreement (NAFTA). It includes programs such as the CAPLines, which provide
assistance to businesses for meeting their short-term working capital needs. There is also the Community
Adjustment and Investment Program. This program is designed to assist businesses that might have been
adversely impacted by NAFTA.
• Express and pilot programs. These loan programs are designed to accelerate the process of providing
loans. SBA Express can respond to a loan application within thirty-six hours while also providing lower
interest rates.
• Community express programs. These programs are designed to assist borrowers whose businesses
are located in economically depressed regions of the country.
• Patriot express loans. These loans are designed to assist members of the US military who wish to
create or expand a small business. These loans have lower interest rates and can be used for starting a
business, real estate purchases, working capital, expansions, and helping the business if the owner should
be deployed.
• Export loan programs. Given the remarkable fact that 70 percent of American exporters
have less than twenty employees, it is not surprising that the SBA makes a special effort to
support these businesses by providing specialized loan programs. These programs include the
following:
o Export Express Program. This program has a rapid turnaround time to support export-based
activities. It can provide for funds up to $500,000 worth of financing. Financing can be either a term loan
or a line of credit.
o Export Working Capital Program. A major challenge that small exporters face is the fact that many
American banks will not provide working capital advances on orders, receivables, or even letters of credit.
This SBA program assures up to the 90 percent of a loan so as to enhance a business’s export working
capital.
o SBA and Ex-Im Bank Coguarantee Program. This is an extension of the Export Working Capital
Program and deals with expanding a business’s export working capital lines up to $2 million.
o International Trade Loan Program. This program, with a maximum guarantee of $1.75 million,
enables small businesses to start an exporting program, enlarge an exporting program, or deal with the
consequences of competition from overseas imports.
