Can an SBA CAPLine be renewed, and for how long?
Short answer
Yes, within limits. A CAPLine under 10 years can be renewed if total revolving time stays within 120 months. A renewal extends the maturity and keeps the same loan number (SOP 50 10 8.1, Appendix 17, Para. B.5).
Yes. A CAPLine with a maturity under 10 years can be renewed. The total revolving period may not exceed 120 months (SOP 50 10 8.1, Appendix 17, Para. B.5). A renewal is an extension of maturity, not a new loan, so the loan number stays the same.
How long a CAPLine can run
- Working Capital, Contract and Seasonal CAPLines: up to 10 years.
- Builders CAPLines: up to 60 months plus the estimated time to complete construction or rehabilitation (13 CFR 120.396).
The fee at renewal
If the original maturity was 12 months or less and the new maturity is longer, an additional guaranty feeA fee SBA charges on the guaranteed part of a loan. The lender pays it and may pass it to you. Full definition is due. The FY2027 upfront fee on a maturity of 12 months or less is 0.25% of the guaranteed portion (Information Notice 5000-881797, p. 2).
Single-purpose lines
A Contract, Seasonal or Builders CAPLine can finance a single transaction. Its maturity should then be tied to the contract, seasonal cycle or project completion date (Appendix 17, Para. B.5).
Exit strategy
Every CAPLine must have an exit strategy. The final disbursement should come early enough for financed assets to turn back into cash before final payment (Appendix 17, Para. B.5).
Whether to renew is the lender's credit decision. For a Working CapitalMoney for day-to-day costs such as payroll, rent and inventory. Full definition CAPLine, each renewal requires a full credit and collateralProperty a lender can take and sell if a loan is not repaid. review (Sec. B, Ch. 4, Para. F). If the review fails, no further disbursements may be made and the loan may not be renewed.
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