Use of  Los Angeles sba7(a) Loan Proceeds

If you are awarded a 7(a) loan, the loan proceeds may be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business.

Eligible Use of 7(a) Loan Proceeds Include (Non-Exclusive):

  • The purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities[/success]
  • The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
  • Long-term working capital, including the payment of accounts payable and/or the purchase of inventory
  • Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production
  • Financing against existing inventory and receivable under special conditions
  • The refinancing of existing business indebtedness that is not already structured with reasonable terms and conditions
  • To purchase an existing business

Los Angeles SBA loans cannot be used for these purposes:

  • To refinance existing debt where the lender is in a position to sustain a loss and SBA would take over that loss through refinancing
  • To effect a partial change of business ownership or a change that will not benefit the business
  • To permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business’s continuance until the loan supported by SBA is disbursed
  • To repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow
  • For a non-sound business purpose

Use of SBA 7(a) Loan Proceeds

If you are awarded a 7(a) loan, the loan proceeds may be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business.

Eligible Use of 7(a) Loan Proceeds Include (Non-Exclusive):

  • The purchase land or buildings, to cover new construction as well as expansion or conversion of existing facilities
  • The purchase of equipment, machinery, furniture, fixtures, supplies, or materials
  • Long-term working capital, including the payment of accounts payable and/or the purchase of inventory
  • Short-term working capital needs, including seasonal financing, contract performance, construction financing and export production
  • Financing against existing inventory and receivable under special conditions
  • The refinancing of existing business indebtedness that is not already structured with reasonable terms and conditions
  • To purchase an existing business

SBA loans cannot be used for these purposes:

  • To refinance existing debt where the lender is in a position to sustain a loss and SBA would take over that loss through refinancing
  • To effect a partial change of business ownership or a change that will not benefit the business
  • To permit the reimbursement of funds owed to any owner, including any equity injection or injection of capital for the business’s continuance until the loan supported by SBA is disbursed
  • To repay delinquent state or federal withholding taxes or other funds that should be held in trust or escrow
  • For a non-sound business purpose

1. How do I apply for a SBA Loan Guarantee?

http://www.sba.gov/financing/sbaloan/snapshot.html


2. What do I need to qualify for a SBA Loan?

http://www.sba.gov/financing/sbaloan/7a.html


3. What type of collateral do I need for a loan?


4. How does the SBA guarantee loan program work?

The business applies to a lender for their financing.


5. Where do I obtain an application for a SBA loan?

Applications have been provided by SBA to all lenders that actively participate with us. Applications can be obtained from the lender you will be working with, or at

your local SBA Office

Many forms are also available online at

www.sba.gov/library/forms

http://www.sba.gov/financing/basics/applyloan.html


6. What is the interest rate on SBA loans?

http://www.sba.gov/financing/subfiles/7a_interest_rates.html


7. How long do I have to repay a SBA loan?


8. What if the lender declines me for a SBA Guaranteed loan?


9. How do I get a small business grant

http://www.sba.gov/financing/basics/grants.html

SBA does however provide a loan guaranty program for loans made by your local lender. The SBA guarantees loans that the lender could not normally approve. For information on this program and ALL of SBA’s financial assistance, please go to http://www.sba.gov/financing/sbaloan/7a.html .


10. What types of Businesses are Eligible for SBA Loan Programs?

SBA-LOAN-los-angeles-learn-more

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