Small Business Administration (SBA)

The SBA is a federal agency providing financial assistance to small businesses and requiring longer repayment terms. SBA loans are used to finance construction or modernization of facilities, purchasing machinery or equipment or increasing permanent working capital. SBA guarantees up to 85% of the financing. Types of SBA loans are

• SBA 7(a) is the basic program for loans up to $2,000,000 with a maximum guaranty of $1,000,000. Loans up to $150,000 are 85% guaranteed by the SBA and loans above $150,000 are 75% guaranteed. Loans may be for most business purposes. Maturities are usually 5-7 years for working capital loans and 25 years for real estate and equipment loans.
• SBA PLP - Hawaii National Bank is an authorized SBA 7(a) PLP (Preferred Lender Program) Lender. Under the PLP designation, Hawaii National Bank enjoys the full delegation of lending authority. Not every bank in Hawaii has the PLP designation.
• SBA 7(a) CAPLINES is a specialized loan program designed to assist small businesses meet their short-term cyclical working capital needs:
  
  • Contract Loan Program - to finance material and labor needs for specific contracts. May be either on revolving or non-revolving terms.
  • Seasonal Line of Credit Program - to finance the short-term seasonal increases in accounts receivable and inventory.
  • Building Line Program - provides financing for small general contractors involved in residential or commercial construction or building rehabilitation for resale.
  • Small Asset-Based Line Program - provides revolving lines up to $200,000 to purchase inventory, pay direct labor or finance accounts receivables and is advanced against existing inventory and accounts receivables.
  • Standard Asset-Based Line Program - similar to the Small Asset-Based program (above) but for loan amounts over $200,000

• SBA Low Doc is a program to streamline the making of small business loans up to $150,000. SBA guarantees 85% of the maximum loan amount of $150,000. Loan maturities are usually 5-7 years for working capital loans and up to 25 years for real estate or equipment loans. Once the loan is approved by Hawaii National Bank, the loan applicant completes a one-page SBA application. The loan package is then sent to the SBA for approval. SBA will respond within 36 hours.
• SBA Express is a program to facilitate small business loans up to $150,000. SBA guarantees up to 50% of the loan amount. Maturities are usually 5-7 years for working capital loans and up to 25 years for real estate or equipment loans.
• SBA 504 is designed for expanding businesses that do not have the resources for a large down payment but whose net operating profits are sufficient for debt service requirements. Healthy businesses whose expansion plans call for investment and use of real estate or equipment may qualify for 90% financing through the 504 loan.
• SBA Export Working Capital Program provides pre- and post-export working capital financing for export sales. It is transaction-based and can be a revolving line of credit or structured for each purchase order, shipment or contract.
• SBA International Trade Loan Program is designed for companies preparing to export or to increase their export sales and companies adversely affected by import competition.