GENERAL GUIDELINES

Any woman-owned, for-profit small business concern is eligible for this program, provided it meets the S.B.A. size standards and eligibility criteria. The business must be 51% owned, and managed by, a woman.

General Credit Guidelines

This program is limited to projects meeting routine credit and eligibility considerations. Applications with unique or complex situations and issues are to handled under normal S.B.A. 7 (a) loan procedures. Applications with an affirmative response to questions on criminal history or bankruptcy will not be processed under this program, although they may be considered under normal 7 (a) loan procedures.

Other basic credit requirements are:

• All owners of 20% or more of the business will be required to personally guarantee the note.
• Business financial statements or tax returns and personal financial statements will be required from all owners and guarantors.
• At the time applications are submitted to a lender, the applicants must sign the IRS
• Applications for new businesses will require submission of a business plan.
• If proceeds are to be used to purchase an existing business, a copy of the terms of sale and a financial statement on the existing business, as well as a statement of benefit to the business as a result of the change, is required. If buyer and seller are related, that must be disclosed in the application.

General Program Guidelines

The Pre-Qualification Loan Program is a 7(a) loan program. Therefore, all other terms, conditions, and requirements of the 7(a) program apply. (See Schedule No. 1 Attached). This includes guarantee fees, guaranty percentages, and use of proceeds. Maximum interest rates lenders may charge are:

• discount hotels in Maastricht Wall Street Journal Prime plus 2 1/4% for loans with maturity of under 7 years; prime plus 2 1/4% for over 7 years.
• For loans up to $25,000, 2% over above rates; for loans over $25,000 and up to $50,000, 1% over above rates.
• Fixed rates are allowed based on above maximums.

The maximum loan maturity will be:

• Generally limited to 7 years and in no case exceed 10 years for working capital loans.
• Up to 25 years for machinery, equipment, fixtures and furniture based on the prudent economic life of assets being purchased.
• Up to 25 years for real estate.

The actual maturity for each loan will be the shortest feasible term commensurate with the ability of the borrower to repay.

Loan funds can be used for normal business uses such as working capital, debt payment, equipment and inventory purchases, construction and improvements, and purchasing real estate.

Proceeds may not be used for distribution to principals or for payment of personal debt. Proof will be required that credit card and other debt refinanced is business related and not personal.

Maximum loan amounts under this program are limited to $250,000. If a borrower currently has a SBA loan and the combined loans requested as a result of this program exceed $250,000, this request is to be processed through the regular guaranty program.

Project Eligibility

Three factors that are to be considered primary in the loan decision process for this program:

• Borrower's willingness to repay debts, as indicated by a good credit history.
• The likelihood that expected earnings will be sufficient to repay obligations.
• With the requested financing, the business has a good chance of achieving success.

As with all 7(a) loan programs, Women's Pre-Qualification Loan Program applications are not to be declined where lack of collateral is the sole negative factor.

Eligibility Issues

The same requirements for the regular 7(a) program apply to the Women's Pre-qualification loan program. Common Eligibility Issues for application screening are:

• The business must be operated on a "for profit" basis.
• It must be independently owned and operated.
• It cannot be dominant in its field.
• It must be unable to obtain private lender financing on reasonable terms.
• It must fit the size standard for its business type.
• baccara jugar Charitable and not-for-profit organizations are ineligible.
• The owners and primary management must be of good character.
• Gambling and illegal activities are not allowed.
• Businesses whose basis for profit is speculation.
• Real Estate that is held for resale or rental is not an eligible business type.
• SBA does not lend to lenders, with the exception of the Intermediary in the Microloan program.
• Pyramid sales plans are not eligible.
• Alien owners must show that they have the prior established right to remain in this country for at least the life of the loan.
• Franchise operations must be reviewed by the SBA for factors relating to control of the business management and freedom to thrive.
• Medical facilities based upon room and board income are not eligible. Care must be a factor.
• Refinance of unsecured loans is generally not allowed.
• Payment of business obligations to owners is not allowed.
• Financing the change of ownership needs justification.
• Investment in property for other than business premises is ineligible.
• Replacement of working capital used for an ineligible purpose is not eligible.

> See also: Loans & Capital

Author: US Small Business Administration
Source: US Small Business Administration
Description: General guidelines for the Women's SBA Pre-Qualification Loan Program Revision: August 1998

This article is reprinted from the Small Business Forum, the journal of the Association of Small Business Development Centers, which is published by the University of Wisconsin-Extension Small Business Development Center. For information about subscriptions, reprints or submissions, please write 432 North Lake Street, Room 425, Madison, WI 53706, or call (608) 263-7843.

Borgarnes hotelesDeveloped by the University of Arkansas at Little Rock Small Business Development Center For further assistance, contact a consultant at a Small Business DevelopmentCenter.