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U.S. Community Adjustment And Investment Program (CAIP)

Written by: Start Your Business

Article Overview: CAIP is a program established to assist U.S. companies that are doing business in areas of the country that have been negatively affected by NAFTA. Funds administered by Treasury (see below) allow for the payment of fees on eligible loans. These fees include the 7(a) program guarantee fee (and subsidy) and the 504 program guarantee, CDC and lender fees. Depending on the loan size, the fees can be sizeable.

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U.S. Community Adjustment And Investment Program (CAIP)

U.S. Community Adjustment And Investment Program (CAIP)

General Description

CAIP is a program established to assist U.S. companies that are doing business in areas of the country that have been negatively affected by NAFTA. Funds administered by Treasury (see below) allow for the payment of fees on eligible loans. These fees include the 7(a) program guarantee fee (and subsidy) and the 504 program guarantee, CDC and lender fees. Depending on the loan size, the fees can be sizeable.

The CAIP works with the SBA in both their 7(a) Loan Guarantee Program and 504 Program to reduce borrower costs and increase the availability of these proven business assistance programs. CAIP can be used with both the 7(a) and 504 Loan Programs

Eligibility

To be eligible, certain criteria must be met; for example, the business must reside in a county noted as being negatively affected by NAFTA, based on job losses and the unemployment rate of the county; this was recently expanded to allow for granting eligibility to defined areas within a county (which will allow SBA to react quickly in offering to provide assistance when, for example, a plant closes).

In addition, there is a job creation component. For 7(a) loans, one job has to be created for every $70,000 SBA guarantees. For 504 loans, one job has to be created for every $50,000 SBA guarantees.

Eligible CAIP Communities

Currently, over 230 counties in 29 states are designated as eligible. Here is a listing of all communities (PDF File)which have been designated as eligible for funding under the Community Adjustment and Investment Program (CAIP). This second file contains the eligible zip codes for urban communities.

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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.

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