SBA CAPLines

Janover Capital editorial team · Checked November 9, 2026

Short answer

CAPLines are 7(a) lines of credit for short-term and cyclical needs, up to $5,000,000. The four types are Working Capital, Contract, Seasonal and Builders. Most can run up to 10 years. Builders lines have their own limit (SOP 50 10 8.1, Sec. B, Ch. 4; App. 17, Para. B.5).

Maximum line: $5,000,000
Maximum term: 10 years
No collateral required up to: $50,000

Key facts

SBA CAPLines: key facts
Fact	Value
Maximum line	$5,000,000
SBA guaranty share	85% or 75%, by loan size
Maximum term	10 years
No collateral required up to	$50,000
Types	Working Capital, Contract, Seasonal and Builders
Builders term	60 months plus the estimated time to complete construction or rehabilitation
Maximum variable rate	Prime plus 3.0 to 6.5 percentage points, depending on loan size
Minimum coverage	1.15 historical or projected, and 1:1 global

What CAPLines are

CAPLines finance the cyclical, recurring or short-term operating needs of small businesses (13 CFR § 120.390). A line can be revolving or non-revolving. Proceeds can create current assets or finance ones you already have.

Cash flow is the primary source of repayment, and on a CAPLine it can include converting assets to cash (Sec. B, Ch. 4, Para. C). Citations here refer to SOP 50 10 8.1, effective October 1, 2026.

The four types and who can use them

Working Capital. A line against accounts receivable and inventory. You must generate receivables, not notes receivable, or hold inventory (Sec. B, Ch. 4, Para. A.1).
Contract. Finances the costs of one or more specific contracts, including overhead allocable to them. You must show you have completed similar contracts profitably (Para. A.2).
Seasonal. Finances seasonal increases in receivables and inventory, and in some cases labor. You need at least 12 calendar months in operation and a definite seasonal pattern (Para. A.3).
Builders. For small general contractors that build or rehabilitate residential or commercial property for resale. You need a record of profitable, comparable projects (Para. A.4).

What each type cannot do

Working Capital. Short-term operating needs only. If a line buys a fixed asset, the lender must refinance that amount into a term loan. The deadline is 90 days after the lender discovers it (Sec. B, Ch. 4, Para. A.1.b).
Contract. Not for permanent working capital, fixed assets, changes of ownership, mark-up or profit, or a contract where significant performance has begun (Para. A.2.b).
Seasonal. Not for keeping the business running through slow periods (Para. A.3.b).
Builders. Direct construction and substantial renovation costs only. Land cannot exceed 33% of project cost. Not for vacant land held for future construction (Para. A.4.b).

On refinancing, Contract, Seasonal and Builders CAPLines cannot refinance existing debt; Working Capital CAPLines may refinance only short-term revolving debt (App. 14, Paras. B.4-5).

Limits and terms

Maximum: $5,000,000 (Sec. B, Ch. 4, Para. B.1).
Guaranty: 85% on loans of $150,000 or less and 75% on larger loans (App. 16, Paras. A.1 and B.4).
Working Capital, Contract and Seasonal terms: up to 10 years. A shorter line can renew if the total revolving period stays within 120 months (App. 17, Para. B.5).
Builders term: 60 months plus the estimated time to complete construction or rehabilitation (13 CFR § 120.396).
Exit plan: every CAPLine must have an exit strategy (App. 17, Para. B.5.c).

How a line is sized

Working Capital without a borrowing base. The lender uses its own method or a formula: prior-year net sales divided by 365, times the days to finance (Sec. B, Ch. 4, Para. B.1.c).
Working Capital with a borrowing base. The size follows available collateral and your expected need (Para. B.1.c).
Contract. Generally the costs of the contract, as shown in a project cost schedule (Para. B.1.d).
Seasonal. Based on cash flow projections and the cost of the seasonal buildup (Para. B.1.e).
Builders. A non-revolving line, or a sub-note for one project, is based on a written proposal of costs, not the expected selling price. A revolving master note is based on cash flow projections for all of your work (Para. B.1.f).

Rates and fees

The rate is negotiated, up to the 7(a) maximum. The maximum variable rate is Prime plus 3.0 to 6.5 percentage points, depending on loan size (Sec. B, Ch. 4, Para. B.4). The guaranty feeA fee SBA charges on the guaranteed part of a loan. The lender pays it and may pass it to you. Full definition follows the 7(a) schedule (Information Notice 5000-881797). A maturity of 12 months or less pays 0.25% of the guaranteed portion. The fee is 0% for loans of $700,000 or less to manufacturers (NAICS 31-33), listed food supply chain businesses and businesses in rural areas.

On Working Capital lines disbursed against a borrowing base, the lender may charge servicing fees above 2% at the annual review. The fee must be reasonable and no higher than on its similar non-SBA loans (Sec. B, Ch. 4, Para. D.1).

Collateral and credit tests

SBA does not require collateralProperty a lender can take and sell if a loan is not repaid. on a CAPLine of $50,000 or less (App. 19, Para. B.5).

Working Capital with a borrowing base. A first lien on receivables and inventory.
Working Capital without one. The lender assumes full use and must secure the line at a 1:1 collateral ratio.
Contract. A first lien on the contract and its proceeds.
Builders. No less than a second lien on the property being built or renovated, if the first lien financed its purchase.

Debt service coverageCash available for loan payments, divided by those payments. Above 1 means the cash covers them. Full definition must be at least 1.15 on a historical or projected basis, and 1:1 on a global basis (Sec. B, Ch. 4, Para. C.2). A lender can submit a CAPLine to SBA or decide it under PLP authority (Para. C.1).

What this page cannot tell you

A lender's monitoring requirements and fees vary within SBA's limits, so compare them before you commit. SBA's public 7(a) loan file lists approved loans only. It holds no applications and no declines, so it cannot show how many requests were turned down. We do not estimate approval odds.

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