SBA SBA Loan Programs & Lending Requirements 2 — Questions and Answers
Question 1: Which SBA loan program provides lines of credit to help businesses meet short-term working capital needs?
- SBA 504
- SBA CAPLines (Correct answer)
- SBA Microloan
- SBA Export Working Capital
Correct answer: SBA CAPLines
The SBA CAPLines program provides lines of credit to help small businesses meet their short-term and cyclical working capital needs.
Question 2: What is the maximum maturity term for an SBA 7(a) loan used for real estate?
- 10 years
- 15 years
- 25 years (Correct answer)
- 30 years
Correct answer: 25 years
SBA 7(a) loans used for real estate purchases can have a maximum repayment term of 25 years.
Question 3: Which entity sets the maximum interest rates that lenders can charge on SBA 7(a) loans?
- Federal Reserve
- SBA (Correct answer)
- Individual lenders
- U.S. Treasury
Correct answer: SBA
The SBA sets the maximum interest rates that lenders can charge on SBA 7(a) loans.
Question 4: An SBA Preferred Lender has what key advantage over standard SBA lenders?
- Lower interest rates
- Authority to make final credit decisions without SBA review (Correct answer)
- Access to higher loan amounts
- No collateral requirements
Correct answer: Authority to make final credit decisions without SBA review
SBA Preferred Lenders have delegated authority to make final credit decisions without prior SBA review, speeding up the loan process.
Question 5: For SBA loan eligibility, what size standard is most commonly used to determine if a business qualifies as 'small'?
- Annual payroll under $1 million
- Number of employees or annual revenue by industry (Correct answer)
- Net worth under $5 million
- Market share under 10%
Correct answer: Number of employees or annual revenue by industry
The SBA uses industry-specific size standards based on number of employees or annual receipts to determine if a business qualifies as small.
Question 6: What does the SBA 504 loan program require regarding the borrower's equity contribution?
- 5% down payment
- 10% down payment minimum (Correct answer)
- 20% down payment
- No down payment required
Correct answer: 10% down payment minimum
SBA 504 loans typically require the borrower to contribute at least 10% of the project cost as a down payment.
SBA SBA Loan Programs & Lending Requirements 2
Which SBA loan program provides lines of credit to help businesses meet short-term working capital needs?