An Innovative Loan Program for Small Businesses
the best of economies, some entrepreneurs may find it difficult to obtain
the financing necessary to turn their ideas into profitable businesses.
The Community Express program offers these businesses an innovative
Express combines the lending expertise and capital of commercial banks,
technical assistance from a designated Financial Services Intermediary
(The Business Resource Group) along with the SBA's enhanced loan guarantee,
to help entrepreneurs whom might not otherwise qualify and obtain financing
for their businesses. The technical assistance component, adds value
to the loan application process, by better preparing the applicant to
qualify for the requested loan. Technical assistance (TA) also offers
ongoing support to aid the business to reach its goals and objectives,
after the loan is funded.
under Community Express may be used for most business purposes, including
start-up, expansion, equipment purchases, working capital, inventory
or real estate acquisitions.
Community Express loans are available to persons who meet the normal
requirements for an SBA business loan guaranty, but cannot qualify without
additional help. CommunityExpress loan applicants must also --
be located in one of the specially designated areas, or
be identified as New Markets small businesses,. (owned by minorities,
women, or veterans, who are underrepresented in the population of small
business owners compared to their percentage in the overall population.)
Does the Program Work & What Is a SBA Guaranty?
All SBA Community Express Loans are processed through an approved Financial
Services Intermediary and TA Provider, who provides both pre-and-post
loan technical assistance to qualified applicants. The financial services
intermediary evaluates the loan package, the company's strengths and
weaknesses, and documents the businesses ongoing support needs, prior
to forwarding the loan request to its selected SBA-participating Community
Express lender. The lender uses more flexible loan analysis and documentation
procedures in order to simplify and expedite the approval process. The
Business Resource Group works with the applicant and lender each step
of the way. After bank approval, completed loan applications, are submitted
to the SBA in Sacramento, California, with a typical response to the
lenders, within 36 hours.
guaranty encourages lenders to make loans that they otherwise might
not make on their own. The SBA's CommunityExpress guaranty levels are
85 percent on loans of $150,000 or less and 75 percent on loans of more
than $150,000. The maximum loan amount under CommunityExpress is $250,000.
Interest Rates and Fees
Interest rates are negotiated between the borrower and the lender and
are tied to the Wall Street Journal prime rate, which may not exceed
2.75 percent over the prime rate. Maturities on Community Express loans
are generally five to ten years. Loans for fixed-assets can be up to
25 years. Community Express revolving loans, however, are limited to
a maturity of seven years.
Because many New Markets small businesses face unique problems and challenges,
the Community Express Program also includes pre- and post-loan closing
assistance in the form of marketing, financial management and planning
assistance. The Business Resource Group supplies the technical assistance.
Express FACT SHEET