Small Business Loans & Grants!

CAPLines

Short Term Loans and Revolving Lines Of Credit

CAPLines is the U.S. Small Business Administration's (SBA) umbrella lending program that helps small businesses meet their short-term capital needs. CAPLines can be used to:

Finance seasonal capital needs;
Finance the direct costs of performing construction,
service and supply contracts;
Finance the direct cost associated with commercial and
residential construction without a firm commitment for
purchase; and
Finance operating capital by obtaining advances against
existing inventory and accounts receivable.

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There are five distinct short-term working-capital loan programs under the CAPLines umbrella including:

Seasonal Line
Finances anticipated needs during seasonal upswings in the business cycle. Repayment is made from the sale of inventory and collection on receivables created during the season. The Seasonal Line can be revolving or nonrevolving.

Contract Line
Finances the direct labor and material costs associated with performing assignable contract(s). One contract line can finance more than one contract.

Builders Line
Finances the direct labor and material costs for small general contractors and builders that construct or renovate commercial or residential buildings. The building project serves as the collateral; Builders Line loans can be revolving or nonrevolving.

Standard Asset-Based Line
Provides financing for cyclical, growth and recurring short- term needs by advancing funds against existing inventory and accounts receivable. Repayment comes from converting short- term assets into cash and remitting this cash to the lender. Businesses continually draw and repay as their cash cycle dictates. This line of credit is generally utilized by businesses that provide credit to other businesses. These loans require periodic servicing and monitoring of collateral, for which additional fees are usually charged by the participating bank.

Small Asset-Based Line
Provides up to $200,000 under an asset-based revolving line of credit similar to the Standard Asset-Based Line, except that some of the stricter servicing requirements are waived (provided that the business can consistently show repayment ability from cash flow for the full amount).

Loan applicants must:

Demonstrate the capability to convert short-term assets into cash;
Demonstrate sufficient management ability, experience and commitment necessary for a successful operation;
Demonstrate the capability to perform, and collect payment for that performance;
Have a feasible business plan;
Have adequate equity or investment in the business;
Have the capability of providing required updates on the status of current assets;
Pledge sufficient assets to adequately secure the loan; and
Be of good character.

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