SBA broadens 7(a) loan eligibility
WASHINGTON, D.C. — The Small Business Administration has temporarily broadened eligibility for its 7(a) guaranteed loans, according to a release from the National Marine Manufacturers Association.
From now until Sept. 30, 2010, an alternate size standard will replace the SBA’s traditional size standard for 7(a) loans, allowing a small business to qualify based on net worth and average income.
Traditionally, marine dealers were only eligible for the SBA 7(a) loan program if they had total annual receipts less than $7 million, and a boat manufacturer would only qualify if it had less than 500 employees, NMMA said.
With the new alternate standard, a marine dealer can qualify for SBA 7(a) loans that can be used for working capital and the refinancing of existing debt if it has a tangible net worth not in excess of $8.5 million (including its affiliates), and an average net income after federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years not in excess of $3 million.
“The expansion in the SBA’s loan eligibility requirements is another positive step forward in helping marine dealers secure much needed access to capital, though more work remains to be done,” NMMA President Thom Dammrich said in the release.
NMMA reported that, along with the National Marine Bankers Association, it is working with the SBA to develop a program for SBA 7(a) floorplan loans.
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