What Is An SBA CAPLines Loan Program?
The SBA CAPLines comes with four SBA loans or lines of credit products that provide up to $5 million to help small businesses meet their short-term working capital needs. SBA CAPLines work best for businesses that need a revolving line of credit to make recurring payments or to manage unexpected expenses.
SBA CAPLines Loan Type
Below we have provided the four types of SBA CAPLines :
1. SBA Seasonal Line of Credit Loan Program
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.
2. SBA Contract Line of Credit Loan Program
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.
3. SBA Builders Line of Credit Loan Program
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.
4. SBA Working Capital (Asset-based) Line of Credit Loan Program
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.
How to Apply for an SBA CAPLine Line of Credit
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.
SBA CAPLines Requirements
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