The new combined Pre-Qualification Pilot Loan Program was developed primarily to address the following markets, identified by SBA as underserved, via traditional lending programs: women, veterans and minority-owned businesses, as well as exporters, rural markets and certain designated geographical areas and industries.

The Pre-Qual concept revolves around intermediaries who help market the SBA’s loan programs and assist prospective borrowers in assembling a viable loan application package.

To be eligible, a prospective business must be 51 percent or more owned by veterans, women and/or minorities. Export-eligible loans are those made with the intention of significantly expanding existing export markets or developing new export markets. With respect to rural markets, and other specially designated geographical areas or industries, contact your local SBA office for specific requirements.

The maximum loan amount under this program is $250,000. If a borrower currently has an SBA loan and the combined loans required as a result of this program are more than $250,000, the request is to be processed through the regular guaranty program.

The Pre-Qualification Loan Program is a 7(a) loan program. Therefore all other terms, conditions and requirements of the 7(a) program apply as prescribed by SBA’s policies and regulations

Micro-Loans
The MicroLoan Program provides very small loans to start-up, newly established, or growing small business concerns. Under this program, SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000. The average loan size is about $10,500. Applications are submitted to the local intermediary and all credit decisions are made on the local level.

Terms, Interest Rates And Fees:
The maximum term allowed for a microloan is six years. Loan terms vary according to the size of the loan, the planned use of funds, the requirements of the intermediary lender, and the needs of the small business borrower. Interest rates vary, depending upon the intermediary lender and costs to the intermediary from the U.S. Treasury.

Collateral
Each intermediary lender has its own lending and credit requirements. However, business owners contemplating application for a microloan should be aware that intermediaries will generally require some type of collateral, and the personal guarantee of the owner.

Technical Assistance
Each intermediary is required to provide business based training and technical assistance to its microborrowers. Individuals and small businesses applying for microloan financing may be required to fulfill training and/or planning requirements before a loan application is considered.