The 7(M) Microloan Program
These loans are provided directly by a network of intermediaries approved by the SBA for the purpose of making microloans (from $100 up to $35,000) to small businesses for the purchase of machinery, equipment, furniture, fixtures, inventory and also for working capital. These intermediaries also provide technical and management assistance to the owners. Most small businesses who are unable to obtain funding through conventional sources or the other SBA guaranteed loan programs should contact the microloan lenders in their area.
The Small Business Investment Company (SBIC) Program
There are a variety of alternatives to bank financing for small businesses, especially business startups. The Small Business Investment Company Program is the gap between the availability of venture capital and the needs of small businesses that are either starting or growing. Licensed and regulated by the SBA, SBICs are privately owned and managed investment firms that make capital available to small businesses through investments or loans. They use their own funds plus funds obtained at favorable rates with SBA guaranties and/or by selling their preferred stock to the SBA. SBICs are forprofit firms whose incentive is to share in the success of a small business. In addition to equity capital and longterm loans, SBICs provide debtequity investments and management assistance. The SBIC Program provides funding to all types of manufacturing and service industries. Some investment companies specialize in certain fields, while others seek out small businesses with new products or services because of the strong growth potential. Most, however, consider a wide variety of investment opportunities.
Community Adjustment & Investment Program
The Community Adjustment & Investment Program (CAIP) was created to help communities that suffered job losses due to changing trade patterns following the North American Free Trade Agreement (NAFTA). The North American Development Bank has partnered with the SBA and the U.S. Department of Agriculture to make credit available to businesses in eligible communities to create or retain jobs. Business applicants must be able to demonstrate that the loan or loan guaranty will be used to create or preserve at least one job for every $35,000 in loans over a 24-month period.
SBA Pre-Qualification (Pre-Qual) Pilot Loan Program
SBA Pre-Qualification Pilot Loan (Pre-Qual) Program was developed to provide substantive support and assistance in the small business loan application process to those segments of the small business community that traditionally may have been underserved by the lending community.
The Pre-Qual concept was originally introduced as the Women’s Pre-Qualification Pilot Loan Program in June 1994. A Minority Pre-Qualification Pilot Loan Program followed in April 1995. In July 1998, these programs were combined under an umbrella Pre-Qual program to more aggressively market the SBA’s loan programs to a wider variety of underserved markets.