Business Credit Line

Secured Credit Lines for Business Owners

SBA CAPLines Loan

SBA CAPLines loans are lines of credit for businesses’ cyclical or short-term needs. They feature four specific lines:

  • Seasonal CAPLine: Borrowers can only use the loan proceeds for seasonal increases of accounts receivable and inventory.
  • Contract CAPLine: This is for the direct labor and material costs of fulfilling assignable contracts (revolving or non-revolving).
  • Builder’s CAPLine: This is for the direct labor and material costs of an individual general contractor or builder that constructs/renovates commercial or residential buildings. The building project will be the collateral.
  • Working Capital CAPLine: This is an asset-based revolving line of credit for businesses that can’t meet the credit standards of long-term credit. Repayment is made by converting short-term assets into cash, which is given to the lender.

Credit Requirements

When you apply for an SBA 7(a) loan, we will evaluate your creditworthiness based on a number of factors:

  1. You must be able to show that you can pay your business expenses, a draw for yourself and the loan payment the income generated by the business. We will ask to see sales records for prior years and cash flow projections.
  1. If you are operating a start-up, we will have questions about your prior business experience and education to determine that you have the know-how to successfully operate the type of business you wish to start.
  1. Business owners need to invest a significant amount of money in their own company before they can seek outside funding. For a startup, we will want to see a minimum of $1 of the owner’s money invested in the business for $3 of loan funding. For an established business, we are looking for a maximum of $4 of debt to $1 of net worth for the business.
  1. We will check your personal and business credit histories. You are more likely to be approved if your credit report shows that you have a history of meeting your credit obligations as agreed. If there are any blemishes on your credit reports, be prepared to explain them to us in detail.
  1. In addition, interested SBA 7(a) borrowers will have to show that they are interested in opening a small business, as defined by SBA’s size standards.


As with all loans, eligibility is ultimately decided on a case by case basis. However, there are some specifics you’ll definitely need to prove.

These include:

  • An intention to do business in the United States
  • A demonstrated need for funding
  • A legitimate business proposal
  • A previous effort to fund your business through personal assets or other financial resources

SBA 7(a) CAPLines Loan

This is a line of credit for businesses’ cyclical or short-term needs.

SBA 7(a) loan Interest rate

Loan Amount

Maturity of less than 7 years

Maturity of more than 7 years

$25,000 or less

Base rate + 4.25%

Base rate + 4.75%

$25,001 to $50,000

Base rate + 3.25%

Base rate + 3.75%

$50,001 and up

Base rate + 2.25%

Base rate + 2.75%

*Current prime rate is 4.50% as of January 2018.

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