Interest rates can be negotiated between the borrower and lender, may be fixed or variable, are tied to the prime rate (as published in the Wall Street Journal), and may not exceed the following SBA maximums:
Follows 7(a) Interest Rate structure
To secure the loan, the borrower must pledge available business and personally owned assets. Loans are not declined when inadequate collateral is the only unfavorable factor.
Personal guaranties of the principals are required.
Length of time for repayment depends on
- Ability to repay, and
- The use of the loan proceeds.
- Maturity is usually 5 to 10 years. For fixed-asset loans it can be up to 25 years.
A business is usually eligible for the SBALowDoc if
- The purpose of the loan is to start or grow a business;
- The existing business employs no more than 100 people, has average annual sales for the preceding three years not exceeding $5 million, and the business including affiliates; the business and its owners have good credit; and the business owners are of good character.
- Loan Limit: $150,000
- Maximum SBA Guaranty Percentage: 85%
- Guaranty Fee: 1% on the Guaranteed Portion
- Eligibility Decision: Relies Heavily on Lender Checklist but the SBA Still Reviews it
- Revolving Lines of Credit are not permitted
- Turnaround Time: 100% Within 36 Hours
- Forms: Revised 1 Page Application Form That Requires More Data, But Same for ALL SBALowDoc Loans Regardless of Amount
- Collateral: Follows 7(a) Policy Lack of available collateral will not be the sole basis for decline of any loan
- Credit Decision: By SBA With Credit Scoring
- Reconsideration: Permitted in the Field Offices Under the SBALowDoc or Regular 7(a) Policies and Procedures.
- Secondary Market: Can Be Sold in the Secondary Market
- Lender Oversight: Field Offices Responsible for Lender Review as Coordinated with the OFA and OFO in HQ
- Liquidation: Lender Liquidates Non-Realty BEFORE Buyback
LowDoc Processing Centers
For questions concerning SBA LowDoc Processing, please contact a LowDoc processing center:
LowDoc Processing Center in Hazard, KY
Phone (606) 436-0801
Fax: 606-435-2400 (for Lender Use Only)
LowDoc Processing Center in Sacramento, CA
Fax: 916-930-2180 (for Lender Use Only)