By Karen Axelton
Is your small business stymied in its attempts to access capital? The SBA is hoping to help, reports The Huffington Post Small Business, by expanding its CAPLine program, which offers SBA-guaranteed lines of credit to small businesses.
Lines of credit offer small businesses the working capital they need to finance inventory purchases or keep going through slow seasons. For example, many small retailers rely on lines of credit to get through the holiday shopping season. But lines of credit offer some special challenges, The Huffington Post notes. For one thing, while small businesses are currently finding it easier to get financing from smaller or community banks, these banks often don’t like to provide lines of credit, which require more staff and special expertise to service. Big banks have the staff and expertise to provide lines of credit, but have more stringent requirements that often put small businesses out of the running.
The revisions to the CAPLine program may help…or they may not. The SBA’s goal is to expand availability of CAPLine lines of credit by reducing the paperwork and servicing required in an effort to encourage more lenders to offer them. Paperwork and red tape have been sticking points with CAPLine and keep many banks from participating in the program, so hopefully the changes will help.
The maximum loan amount for CAPLine lines of credit is $5 million and the term can be up to 10 years. Banks also typically set their own minimums for these loans. You can find out more about the CAPLine program at the SBA website. If you are seeking a lender in your area that participates in the program, the best place to start is with your local SBA District Office. District Offices are informing lenders in their area about the revised program in an effort to bring them on board, so your District Office will have the most up-to-date information about which lenders are involved. Find yours at the SBA website.
Image by Flickr user emdot (Creative Commons)
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Tags: small business financing, small business lines of credit
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