SBA Loan Information Available in RVDA Lender’s
Toolbox
edited by: Phil Ingrassia, CAE
The Small Business Administration’s (SBA) enhanced $15 billion
loan program may help accelerate loans to entrepreneurs and get the
job-generating engine of small business back on track. RVDA has
assembled direct links to SBA’s loan program and developed an RVDA
Fact Sheet that spells out SBA loan size standards for RV dealers in the
RV Lender’s Toolbox, which is available at www.rvda.org.
To be eligible to apply for an SBA 7(a) guaranteed loan, dealers
typically must:
-
Have a need for SBA loan guarantee assistance, e.g., must be unable
to secure conventional commercial financing on reasonable terms;
and
-
Qualify as a “small business.” As defined by SBA, an RV
dealer is a “small business” if its total annual receipts
are less than $7 million. Size standards may be increased by 25 percent
if the applicant is located in an area of substantial unemployment (or
will use the loan proceeds in such an area), as designated by the U.S.
Department of Labor. Approval of an SBA 7(a) guaranteed loan application
will depend upon the availability of funds, an applicant’s
particulars, and the financial decisions of the participating lender and
of SBA. Eligibility does not mean automatic application approval.
SBA 7(a) guaranteed loan proceeds may be used for any worthwhile
purpose, including working capital and the refinancing of existing
indebtedness. SBA guaranteed loan proceeds may not be used for
inventory floor planning. Financing a dealership total change in
ownership is permissible, if the aim is to preserve the dealership,
promote its development, or contribute to the economy by making it
easier for economically and socially disadvantaged persons to own
dealerships.
RVDA and RVIA are actively seeking changes in SBA rules that would
raise the RV dealership size standard and allow the program to be used
for inventory financing.
Among the SBA Loan Program changes announced in March as part of the
American Recovery and Reinvestment Act
-
Waiving fees for SBA loans this year
-
Increasing the guarantee to up to 90 percent on SBA loans
-
Offering zero-interest loans for viable small businesses that have
fallen behind on traditional loan payments.
While the SBA guarantees about $20 billion in loans in a typical
year, its lending is running at half that level in 2009, the government
reported.
Here are links to resources in RVDA’s RV Lenders Toolbox:
RVDA SBA Loan Fact Sheet
http://www.rvda.org/AM/Template.cfm?Section=Home1&Template=/CM/ContentDisplay.cfm&ContentID=7154
Gateway to SBA Loan Program
http://www.sba.gov/services/financialassistance/Introsbafinance/index.html
Frequently Asked Questions About Recent Changes to the SBA
Loan Program
http://www.sba.gov/idc/groups/public/documents/sba_homepage/recovery_act_faqs.pdf
