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Exciting News for Small Businesses: Government-Backed Credit Lines Up to $5 Million
The U.S. Small Business Administration (SBA) is launching a new pilot program offering government-backed credit lines of up to $5 million. This initiative aims to provide more attractive working capital solutions for both lenders and small business owners, addressing ongoing challenges in accessing affordable credit.
Key Highlights of the New Credit Line Program:
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- Simplified Access: The new working capital lines are designed to be simpler and more affordable compared to previous options like the SBA Express loan and CapLines program.
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- Higher Guarantees: Loans larger than $150,000 will have a 75% SBA guarantee, while those below $150,000 will enjoy an 85% guarantee, mitigating lender risk.
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- Competitive Rates: Interest rates will be based on the prime rate plus 3% to 6.5%, translating to approximately 12% to 15% in today’s market.
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- Flexible Use: Small business owners can fund specific projects or borrow against their assets.
Business owners can look forward to applying for these credit lines through the SBA’s website or its pre-screening lender platform. Stay informed and prepared as this change comes into effect, ensuring your business takes full advantage of the new funding opportunities available.