How does a Working Capital CAPLine compare to SBA Express?
Short answer
A Working Capital CAPLine can reach $5,000,000, while an SBA Express line stops at $500,000. The CAPLine carries closer collateral monitoring and a larger guaranty. The SBA Express line runs on the lender's own procedures (SOP 50 10 8.1, Sec. B, Chs. 2, 4).
A Working CapitalMoney for day-to-day costs such as payroll, rent and inventory. Full definition CAPLine is larger and more closely monitored. An SBA Express line is smaller and runs on the lender's own procedures (SOP 50 10 8.1, Sec. B, Chs. 2 and 4).
Side by side
- Maximum: $5,000,000 for a CAPLine. $500,000 for SBA Express.
- Guaranty: 85% on loans of $150,000 or less and 75% on larger loans for a CAPLine. 50% for SBA Express (Appendix 16).
- Credit decision: SBA or a Preferred Lender Program (PLP) lender for a CAPLine. The SBA Express lender alone for SBA Express.
- Term: 10 years, with up to 120 months of revolving, for a CAPLine. 10 years, including any term-out period, for SBA Express (Appendix 17).
- Coverage: at least 1.15 historical or projected, and 1:1 global, for a CAPLine (Ch. 4, Para. C.2). No fixed ratio on most SBA Express loans (Ch. 2, Para. C.2.b).
- Collateral above $50,000: a first lien on receivables and inventory, or 1:1 coverage, for a CAPLine (Appendix 19, Para. B.5). Lender policy for SBA Express (Para. B.3).
- Monitoring: borrowing base reports, annual reviews and field exams at $1,000,000 or more for a CAPLine (Ch. 4, Para. F; Information Notice 5000-882227, p. 3).
Servicing fees
At an annual review, a lender may charge over 2% in extraordinary servicing fees on a Working Capital CAPLine run through a borrowing base. The fee must be reasonable and no higher than on the lender's similar non-SBA loans (Ch. 4, Para. D).
A third option
The 7(a) Working Capital Pilot offers lines up to $5,000,000, effective August 1, 2024 through July 31, 2027 (89 FR 57353).
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