From CNBC: 2024-06-04 10:14:21

The U.S. Small Business Administration plans to introduce new government-backed credit lines up to $5 million, enhancing accessibility for small businesses. The program aims to provide working capital for business expansion, infrastructure projects, and a simplified process for borrowers and lenders to engage in the loan program.

SBA’s efforts to provide revolving lines of credit have seen less utilization than anticipated. Issues with existing products such as the SBA Express loan and CapLines led to the launch of new working capital lines. These new credit lines have annual fees, lower maximum interest rates, and higher guaranty percentages to increase accessibility.

The new working capital lines, part of the 7(a) loan program, offer a promising opportunity for small business owners to secure funding for various projects. With an annual fee and manageable interest rates, the SBA aims to attract more borrowers and simplify the loan process. The guaranty percentages and fee structures have been revamped to suit the needs of borrowers and lenders effectively.

The SBA’s initiative with the working capital lines is expected to provide a flexible and affordable option for small business owners to access the funds they need to grow and thrive. By offering improved terms and conditions, the SBA hopes to be a viable option for businesses seeking financial support in today’s market environment.

Read more: Up to $5 million in funding