CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs. A CAPLines loan, Except the Small Asset-Based Line, can be for any dollar amount that does not exceed SBA's limit. (See the 7(a) Loan program for more information on SBA's Basic Requirements.)
There are five short-term working-capital loan programs for small businesses under the CAPLines umbrella:
Seasonal Line: These are advances against anticipated inventory and accounts receivable help during peak seasons when businesses experience seasonal sales fluctuations. Can be revolving or non-revolving.
Contract Line: Finances the direct labor and material cost associated with performing assignable contract(s). Can be revolving or non-revolving.
Builders Line: If you are a small general contractor or builder constructing or renovating commercial or residential buildings, this can finance direct labor-and material costs. The building project serves as the collateral, and loans can be revolving or non-revolving.
Standard Asset-Based Line: This is an asset-based revolving line of credit for businesses unable to meet credit standards associated with long-term credit. It provides financing for cyclical growth, recurring and/or short-term needs. Repayment comes from converting short-term assets into cash, which is remitted to the lender. Businesses continually draw from this line of credit, based on existing assets, and repay as their cash cycle dictates. This line generally is used by businesses that provide credit to other businesses. Because these loans require continual servicing and monitoring of collateral, additional fees may be charged by the lender.
Small Asset-Based Line: This is an asset-based revolving line of credit of up to $200,000. It operates like a standard asset-based line except that some of the stricter servicing requirements are waived, providing the business can consistently show repayment ability from cash flow for the full amount.
Maximum Loan Amounts Except the Small Asset-Based Line, CAPLine loans follow SBA's maximum loan amounts. The Small Asset-Based Line has a maximum loan amount of $200,000.
Eligibility 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. Eligibility is generally determined by four factors:
Type Of Businesses Eligible Size Use Of Proceeds Loan Maturities 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.
Interest Rates Fees Guaranty Percent Collateral 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.
CAPLines Loans - To learn more about this author, visit Start Your Business's Website.
Like this article? Share it with your friends
 |
Related Articles |
|
 CAPLines Loans
|
| |
CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs. A CAPLines loan, Except the Small Asset-Based Line, can be for any dollar amount ...
|
|
Community Express
|
| |
CommunityExpress is a pilot SBA loan program that was developed in collaboration with the National Community Reinvestment Coalition (NCRC) and its member organizations. Under the pilot, which is available to selecte...
|
|
SBA Loan Programs
|
| |
The SBA offers numerous loan programs to assist small businesses. It is important to note, however, that the SBA is primarily a guarantor of loans made by private and other institutions and does not offer loans to ...
|
|
Loans and overdrafts
|
| |
Details the finance options from high street banks and other sources, with advice on how to choose between them.
|
|
Asset Sales
|
| |
The SBA’s Asset Sales Program is an initiative to sell the agency’s owned portfolio of loans and other assets. These consist of Section 7(a) and 504 guaranteed loans purchased, Section 7(a) and disaster assistance d...
|
|
|
Start Your Business
(Visit Start Your's Website)
Starting a business requires you to
complete a number of steps and make some
key decisions. Though part of your overall
plan, you’ll need to select a location,
decide on a business structure, and obtain
the necessary licenses and permits. In
addition, determining which financing
options will meet your short-term needs
and long-term goals is crucial. Within
this section, we’ll provide information on
these topics along with guidance on buying
an existing business, copyright and
trademark issues, and getting support from
an outside expert.
|
|
|
|
Mastermind Group Resources - Strategies to get the most from your Mastermind Group. The purpose of this blog is to share resources, tips, strategies, and ideas on how to build a Mastermind Group and make it more effective.
|
|
Selling to Small Business - Strategies to help you sell to small business entrepreneurs. The purpose of this blog is to outline strategies companies can take to effectively target small business owners.
|
|
|
Start Your Business's
Complete
List Of
SBA
Articles
|
|
|
If you enjoyed this article, get Start Your Business's Complete List of SBA Articles For FREE!
|
| |
|
|
|
![[Get Copyright Permissions]](http://license.icopyright.net/images/icopy-w.gif){kind=small}
