The U.S. Small Business Administration Community Advantage Loan program is designed for new and existing businesses that need loans under $250,000. The loan can be used to finance a startup company or expand an existing small business or buy real estate. The SBA guarantees 85 percent of loans up to $150,000 and 75 percent of loans greater than $150,000.
Launched in 2011, the Community Advantage program intends to expand access to capital in underserved communities by allowing mission-focused, community-based financial institutions – including a Certified Development Company – to offer this loan to small businesses. Greater access to credit can help spur firms to grow and hire, giving the economy a boost.
The SBA designates specific lenders throughout the United States to offer Community Advantage loans. The first six lenders selected for the program were: CDC Small Business Finance, California; Cen-Tex CDC, Texas; The Progress Fund in Greensburg, Pennsylvania; Eastern Maine Development Corporation, Maine; Idaho-Nevada Community Development Financial Institution, Idaho; Kentucky Highlands Investment Corporation, Kentucky. Thirty-four other lenders have since been approved.
Loan Size and Terms
- Maximum Loan Size: $250,000
- Terms: 7–10 years for working capital, inventory, business acquisitions, tenant improvements, and start-up expenses
- Terms: 25 years for real estate
- Interest Rate: up to Prime + 6%
- No pre-payment penalties
There are specific eligibility criteria for the Community Advantage loan, which include credit history, cash flow and industry experience. A designated Community Advantage lender can help a small business owner determine if they can qualify by reviewing an eligibility form.
- ^“Community Advantage”. U.S. Small Business Administration. Retrieved 13 December 2012.
- ^Clifford, Catherine. “New small business loans approved in ‘minutes'”. CNN Money. Retrieved 13 December 2012.
- ^“SBA Approves First Six Lenders to Start Making Community Advantage Loans”. U.S. Small Business Administration. 28 April 2011. Retrieved 13 December 2012.
- ^“Community Advantage Approved Lenders”. U.S. Small Business Administration. Retrieved 13 December 2012.
- ^“Community Advantage Participant Guide” (PDF). U.S. Small Business Administration. 13 November 2012. Retrieved 13 December 2012.
- ^“Eligibility Information for Community Advantage (CA) Loans” (PDF). U.S. Small Business Administration. Retrieved 13 December 2012.
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.