Delaware Business Blog

New Year Brings New SBA CAPLines Program

By admin February 7, 2012 Accounting & Finance, Business, Delaware, Government, Op-Ed No Comments

By Acting SBA Regional Administrator Bridget Bean

Every January, millions of people start out the New Year with ideas and hopes to improve some area of our lives. For business owners, the New Year is a great time to evaluate the past year and to identify changes business to improve business operations in the hope of increasing sales and hiring more employees.

The U. S. Small Business Administration understands that it is not easy to operate a small business even in good economic times. As we look back over the past few years, the credit situation – although improved from 2008 – has had a major impact on the small business community.

SBA’s CAPLines Program helps small businesses meet their short-term and cyclical working capital needs. SBA regularly meets with lenders and resources partners to get feedback on ways to improve our loan programs and services. SBA reached out to all 50 states last year for comments from more than 150 community lenders on ways this underutilized program could work more effectively for lenders and small businesses.

SBA provides up to an 85 percent guarantee and there are four loan programs under our CAPLines Program: Seasonal Line of Credit Program, Contract Loan Program, Builders Line Program, and Working Capital Line.

This President and Congress knew that getting small businesses the capital they needed was a top priority. That is why the American Recovery and Reinvestment Act and the Small Business Jobs Act, which provided key enhancements such as temporary higher government guarantees on SBA loans and permanently increasing SBA loan limits, was so critical in getting capital flowing to small businesses. As a result, SBA was proud to report record-breaking loan approvals for Fiscal Year 2011, supporting $30 billion in small business lending through over 60,000 loans to small businesses through our two largest loan programs.

Overall, the new and improved CAPLines Program will provide business owners with the working capital to take advantage of new opportunities as they continue to grow their business and create jobs. Small businesses will also benefit from Jobs Act’s new increase to the SBA 7(a) loan limit of $5 million. For small businesses looking to vie for bigger contracts, this will help them be financially prepared to compete and win.

The new CAPLines program will help local companies like Donna and Frank Masley of Masley Enterprises. Masley manufactures specialty gloves for the U.S. military. The gloves have been adopted as the preferred wear for many of our special forces because of their unique combination of comfort, durability, water repellency, and retention of tactile function. This type of loan is especially critical to businesses that are cyclical or depend on renewable contracts for continuity of operations. CAPLines has twice assisted Masley Enterprises continue and expand their business in the last 6 years.

I am happy to report that as of Oct. 1, 2011, SBA has re-engineered the CAPLines Program. Here are the key benefits:

  • Small businesses can pledge accounts receivable, inventory, contracts, and purchase orders in order to secure an SBA revolving line of credit. For example: when fulfilling a purchase order request, the same order can be used as collateral to obtain an SBA-guaranteed line of credit to hire more workers and buy more materials.
  • Small business subcontractors can obtain an SBA-guaranteed line of credit to finance their work on a contract with a federal prime contractor.
  • SBA will no longer require small business owners without building or equipment to use their personal assets as collateral to secure working capital.
  • Small businesses working on a contract that requires surety bonding can obtain an SBA-guaranteed line of credit.

    • Whether you are a startup, currently in business, or a business experiencing difficulties, SBA has programs to help you along the way. As you take time to evaluate your business needs and set goals for this year, don’t forget to reach out to SBA resources. SCORE, Small Business Development Centers and Women’s Business Centers provide counseling and can assist with developing or updating a business plan, marketing plan, or a loan package to take to a lender.

    SBA is extremely proud of these counseling partnerships and what they have to offer small business clients. They are well-versed in our loan programs and are ready to help you work through all phases of business operations. To locate resources in Delaware or to contact the local SBA office go to: www.sba.gov/localresources.

    SBA’s top priority is to get small businesses the capital and the tools they need to startup, grow and stay in business. That is our mission, and we will continue to work with this Administration to help small businesses lead our country in creating jobs to put people back to work.

    Bridget Bean is currently serving as Acting Regional Administrator for the United States Small Business Administration. As Acting Regional Administrator for Region 3, Bean is responsible for the delivery and management of SBA’s small business programs, financial assistance, and business development program initiatives throughout the region, serving a population approaching 29.5 million in the seven SBA districts of Philadelphia and Pittsburgh, Pa.; Wilmington, Del.; Baltimore, Md.; Clarksburg, W.V.; Richmond, Va., and Washington, D.C.

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