- Further streamlines the making of small business loans.
- The maximum loan is $150,000.
- Calls for a response from the SBA within 36 hours of receiving a complete application.
- Guarantee percent follows 7(a) policy.
How It Works
Once a small business borrower meets the lender's requirements for credit, the lender may request a guarantee from the SBA through SBA LowDoc procedures. It's a quick, two-step process:
- The borrower completes the front of the SBA's one-page application, and the lender completes the back.
- The lender submits a complete application to the SBA and receives an answer within 36 hours.
Interest Rates
Interest rates can be negotiated between the borrower and lender, may be fixed or variable, are tied to the prime rate (as published in The Wall Street Journal), and may not exceed the following SBA maximums :
- Follows 7(a) Interest Rate structure.
Collateral
- To secure the loan, the borrower must pledge available business and personal assets. Loans are not declined when inadequate collateral is the only unfavorable factor.
- Personal guarantees of the principals are required.
Maturity
Length of time for repayment depends on:
- Ability to repay.
- The use of the loan proceeds.
Maturity is usually 5 to 10 years. For fixed-asset loans it can be up to 25 years.
Eligibility
A business is usually eligible for the SBA LowDoc if:
- The purpose of the loan is to start or grow a business.
- The existing business employs no more than 100 people.
- Has average annual sales for the preceding three years not exceeding $5 million (including affiliates).
- The business and its owners have good credit.
- The business owners are of good character.
| Issue: |
SBA LowDoc |
| Loan Limit: |
$150,000 |
| Maximum SBA Guarantee %: |
85% |
| Guarantee Fee: |
1% on Guaranteed Portion |
| Eligibility Decision: |
Relies Heavily on Lender Checklist |
| But SBA Still Reviews Revolving Lines of Credit: |
Not permitted |
| Turnaround Time: |
100% within 36 Hours |
| Forms: |
Revised 1 Page Application Form That Requires More Data, But Same for ALL SBA LowDoc Loans Regardless of Amount |
| Collateral: |
Follows 7(a) Policy - Lack of available collateral will not be the sole basis for decline of any loan |
| Credit Decision: |
By SBA with Credit Scoring |
| Reconsideration: |
Permitted in Field Offices Under SBA LowDoc or Regular 7(a) Policies and Procedures. |
| Secondary Market: |
Can Be Sold |
| Lender Oversight: |
Field Offices Responsible for Lender Review as Coordinated with OFA and OFO in HQ |
| Liquidation: |
Lender Liquidates Non-Realty BEFORE Buyback |
LowDoc Processing Centers
For questions concerning SBA LowDoc Processing, please contact a LowDoc processing center:
LowDoc Processing Center in Hazard, KY - (606) 436-0801, Fax: 606-435-2400 (for Lender Use Only)
LowDoc Processing Center in Sacramento, CA - Phone: 916-930-2444, Fax: 916-930-2180
