SBA Community Advantage 7a Loans: the UCEDC/Commercial Lender Partnership

Overview

The SBA Community Advantage 7a loan program is designed to drive economic growth and job creation by expanding access to capital for small businesses and entrepreneurs.

Amount

$50,000 – $250,000 with a SBA guarantee of 75-85%.

Eligibility

For-profit businesses that meet the SBA’s small business size definition. Non-profits, religious institutions, real estate investors, and financial institutions do not qualify.

Uses

Working capital
Furniture/fixtures, machinery and equipment
Renovation, purchase or construction of land and building
Leasehold improvements (100% borrower occupied)
Business acquisition
Refinancing of debt for compelling reasons

Benefits to Customer

Long-term financing, 7-10 years; 20 years for real estate
Flexible collateral requirements
Equity contribution as little as 10%
Financing of closing costs and other fees

Benefits to Bank

Retain/strengthen customer relationship
CRA consideration for second-look programs (NOTE: loans made in federally designated disaster areas are automatically CRA-eligible. NJ declaration expires late 2015)
CRA credit for co-lending

UCEDC Criteria

Start-ups (0 – 24 months)

$150,000 maximum
Minimum of 10% equity
Must have industry-specific experience
May require business plan
Personal guarantee
Must pledge available collateral – lack of any or insufficient collateral does not preclude approval
Minimum score – 650
Minimum DCR – 1.10:1

Existing (2+ years)

Up to $250,000
Minimum of 10% equity
Personal guarantee
Must pledge available collateral – lack of any or insufficient collateral does not preclude approval
All R/E not to exceed 80% LTV
Minimum score – 680
Minimum DCR – 1.15:1