SBA Working Capital Revolving Lines of Credit Helping Small Businesses
by ngoriel, Community Moderator
- Created: November 6, 2013, 1:50 pm
Note: This blog is by Ann Marie Mehlum, Associate Administrator, SBA Office of Capital Access
For businesses both large and small, access to short and long-term working capital can often be a challenge. - Whether it’s a contractor juggling a few jobs at one time, or a store on Main Street looking to bring in this season’s inventory, finding the capital to meet their business needs can often be challenging.
To help make this task easier, the U.S. Small Business Administration (SBA) has streamlined and simplified our CAPLine program, which provides working capital lines of credit designed to help small businesses with their short-term working capital needs, and it’s catching on.
In early 2011, SBA made major enhancements to the CAPLine program to make sure that small businesses had easier access to the working capital that would allow them to keep growing and creating jobs. By mid-2013 the results were clear—the CAPLine program saw a 228 percent increase in the total number of loans approved and a 127 percent increase in the total dollar amount.
Let’s look a little more closely at these enhancements:
It is now possible for small businesses to secure a line of credit using their account receivables, inventory and purchase orders;
Lines of credit are available to small business subcontractors so that they can finance their work with prime contractors; and
Small businesses are no longer required to pledge their personal assets to secure a loan.
In FY 2013, the CAPLine program approved 682 loans for more than $500 million. In FY 2012 and FY 2013, the two full fiscal years since the program was re-designed, SBA approved more than 1,200 loans—a significant increase over the 1,300 loans issued over the prior 15 years (FY 1997 – FY 2011.)
Small businesses are the engine of our economy, creating two out of every three net new jobs in the United States. At SBA, we’re committed to making sure that small businesses have the resources and tools they need to harness their entrepreneurial spirit, grow, and thrive—and the CAPLine program is a critical part of our effort.
About the AuthorHi, my name is Natale and I'm serving as a Moderator for the SBA Community. Our goal is to continually improve this site to meet your needs, so we appreciate your feedback and participation.
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