Specialty purpose Loans are designed to assist those businesses that have been affected by NAFTA, have cyclical financing needs, are developing Employee Stock Ownership Plans (ESOPs), or are implementing pollution control measures. In addition, The SBA special purpose loans offer floor plan pricing loans against business inventory in the event the inventory can be used as collateral.
Programs
- CapLine loans were developed to help businesses with cyclical and short-term working capital needs in cases such as seasonal work or construction. The program provides businesses with a revolving line of credit with a maximum loan limit of $5 million as of 2010. The SBA provides loaning institutions up to an 85% guarantee on the amount of the loan. Within the CapLine loan there are 4 specialized loans available:
- Contract Loan Program: Designed for businesses that have secured a specific contract but are in need of financing for material, labor, overhead etc.
- Seasonal Line of Credit Program: Designed to help cover costs associated with above normal usage for seasonal inventory.
- Builders Line Program: Used by small contractors or developers for residential or commercial property
- Working Capital Line Program: provides revolving line of credit for short-term working capital
- CAIP (Community Adjustment and Investment Program) was developed to aid companies negatively impacted by NAFTA. Its main impact is to assist with payment on fees related to borrowing costs such as lender and guarantee fees.
- Pollution Control is provided for businesses making changes to a facility to control impact from pollution. The funds are restricted for use on fixed assets only. As of 2012, the program was non-operational due to lack of appropriations.
- Employee Trusts provides assistance to Employee Stock Ownership Plans. The maximum loan amount is $2 million with the SBA guarantying between 75 and 85 percent depending on the size of the loan. Businesses are required to meet the requirements for Employee Stock Ownership Plan as prescribed by the IRS, Treasure, and Department of Labor regulations.
- Dealer Floor Plan Pricing is made available to borrowers based borrowing against retail inventory as collateral. The loan utilizes a revolving line of credit allowing borrowers to purchase inventory using credit, but are required to pay back the loan as inventory is sold. This allows business owners to purchase on-hand inventory.
