Community Advantage Loan

The [U.S. Small Business Administration] Community Advantage Loan program is designed for new and existing businesses that need under $250,000 in business capital. The loan can be used to start or expand a 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.^[1]

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 Certified Development Companies – to offer this loan to small businesses. Greater access to credit can help spur firms to grow and hire, giving the economy a boost.^[2]

The SBA designates specific lenders throughout the United States to offer Community Advantage loans. The first six lenders ^[3] selected for the program were: CDC Small Business Finance, San Diego, CA; Cen-Tex CDC in Austin, TX; The Progress Fund in Greensburg, PA; Eastern Maine Development Corporation, Bangor, ME; Idaho-Nevada Community Development Financial Institution, Pocatello, ID; Kentucky Highlands Investment Corporation, London, KY. Thirty-four other lenders have since been approved.^[4]

Loan Size and Terms

Maximum Loan Size: $250,000 ^[5]
Terms: 7-10 years for working capital, inventory, business acquisitions, tenant improvements, and start-up expenses
Terms: 25 years for real estate
Interest Rate: Prime + 6%
No pre-payment penalties

Eligibility

There are specific eligibility criteria for the Community Advantage loan, which include credit history and industry experience. A designated Community Advantage lender can help a small business owner determine if they can qualify by reviewing an eligibility form.^[6]

References

Categories: Business: Finance