SBA Trains Washington, DC Lenders in CAPLines Loans

Nov 03, 2011, 15:42 ET from U.S. Small Business Administration

Short-term working capital available to more local small businesses

ARLINGTON, Va., Nov. 3, 2011 /PRNewswire-USNewswire/ -- Representatives from Washington-area financial institutions met with Steve Smits, the U.S. Small Business Administration's (SBA) Associate Administrator for Capital Access, and Patrick Kelley, Senior Advisor to the Associate Administrator, at a morning roundtable discussion to get an in-depth look at recent changes to SBA's CAPLines program and other loan products.

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"This was a great opportunity for lenders to understand the changes and additions to the CAPLines program," said Regional Administrator A. John Shoraka. "Now lenders have another tool to get capital into the hands of qualifying borrowers, meet small businesses' working capital needs and help them seize new opportunities."

The re-engineered CAPLines program addresses the short-term and cyclical working capital needs of small businesses and helps them manage their cash cycle, scale up, and create jobs. 

"These changes were based on conversations with more than 200 lenders in all 50 states, lenders who are leaders in their markets. We worked with them to create a program that works for small businesses and lenders alike," said Smits.

Bridget Bean, SBA District Director for the Washington Metro Area, added, "They've taken a program that we know is important to our clients and figured out how to make it work better, and for more small businesses. What's noteworthy is not only what's been done but how it was accomplished, not in a conference room in Washington, DC but by engaging the people out in our communities who know what businesses need to succeed."

There are four distinct loan programs under the CAPLines umbrella:

  • The Contract Loan program is used to finance material, labor, and overhead needs for a specific contract or contracts to cover the period between contract award and payment.
  • The Seasonal Line of Credit program is used to support buildup of inventory, accounts receivable or labor and materials above normal usage for seasonal inventory.  
  • The Builders Line program provides financing for small contractors or developers to construct or rehabilitate residential or commercial property.
  • The Working Capital Line program is a revolving line of credit that provides short term working capital.

With the new CAPLines guidelines, small businesses can now borrow against purchase orders to pay for labor, materials and overhead. In addition, small business borrowers no longer have to pledge all available assets. Lastly, small business subcontractors can now obtain an SBA-guaranteed line of credit to finance working on a federal or private contract. Previously, only prime contractors could benefit from this program.

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Contact: Randall Luttenberg, 202-272-0365/randall.luttenberg@sba.gov

SOURCE U.S. Small Business Administration



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