Below we have provided the four types of SBA CAPLines :
A seasonal CAPLines is an SBA line of credit that can provide you up to $5 million that can be used for seasonal boosts in accounts receivable, inventory, or related increased labor expenses. To be eligible for this loan in addition to the standard 7(a) minimum requirements, your business needs to have been in business for at least one year & have shown a pattern of seasonal activity.
A contract CAPLine is an SBA line of credit that’s up to $5 million which is usually used for the materials & labor that’s associated with assignable contracts. To be eligible for this loan program, in addition to the standard 7(a) requirements, your business has to have demonstrated experience, profitability, & the ability to execute the job & complete the assigned contract, subcontract, or purchase order.
A builders CAPLine is an SBA line of credit that also provides up to $5 million for general contractors & home builders who construct or rehab residential or commercial buildings. To be eligible for this loan, in addition to the standard 7(a) requirements, your business needs to prove experience, profitability, & ability to execute the work & complete the project.
A working capital CAPLine is a type of SBA line of credit that allows access up to $5 million which helps small businesses to convert short-term assets like pending invoices into cash. To be eligible for this, similar to the standard 7(a) requirements, your business must generate accounts receivable or have inventory. The working capital CAPLine provides financing that’s not otherwise available.
Fortunately, the application process for an SBA line of credit via the CAPLine program is similar to an SBA 7(a) loan. Most lenders that participate in the SBA 7(a) program are likely to participate in the CAPLine program.
In addition, these lines of credit can be a little difficult to obtain as a standalone product. SBA CAPLines are usually offered in conjunction with an SBA 7(a) loan or an SBA 504/CDC loan. So in general, unless you have a strong business relationship with a lender, it can be a lot more difficult to obtain an SBA CAPLine without a larger SBA loan.
To qualify for the SBA CAPLines program are similar to the SBA 7(a) program with a few add ons. You will need to meet these minimum requirements:
•Minimum credit score: 680
•Other SBA loan requirements: No recent bankruptcies, foreclosures, or tax liens
•Collateral: Short-term collateral like invoices or project contracts
•Down payment: At least 10%
•Personal guarantee: At least 20% guaranteed by owners