SBA HAS SPECIFIC ELIGIBILITY REQUIREMENTS THAT EACH PROSPECTIVE APPLICANT MUST MEET. THE REQUIREMENTS ARE AS FOLLOWS:

  1. Fixed Asset Financing: SBA only finances fixed assets such as land, building and equipment or equipment only. Rolling stock, such as cars or trucks used for business purposes, tractors, trailers, etc., is not permissible. Forklifts are considered eligible equipment. A rule of thumb when considering if the equipment to be purchased is eligible is if it can be driven on the street, it is not eligible.

  2. Project Structure: SBA regulations now require the structure of the loans to fall into one of the four following categories:
     

3.     * The definition of a limited or single-purpose building or structure as taken from the Dictionary of Real Estate Appraisal classifies this type of property as "single-purpose property." Examples include gas stations, motels, car washes, restaurants, bowling alleys, marinas or any other structures that would have limited markets or would require great expense to make them marketable.

  1. Minimum/Maximum Project: The minimum total project is $125,000 with the maximum total project being $2.5 million. If the prospective project is over $2.5 million, the applicant must provide dollar-for-dollar collateral in the amount of the debenture which would be either $1 million or $1.3 million.

  2. Job Creation: One new job for each $50,000 of debenture funds must be created. If the appropriate number of jobs cannot be created, there must be a mitigating factor (i.e. an Economic Development Objective discussed later).

  3. Economic Development Objectives: SBA has several public policy goals that an applicant business may qualify for in which case, that business may receive a $1.3 million debenture.

    The goals are:
    Rural Development, Business District Revitalization, Expansion of Exports, Minority Business Development, Woman-Owned Business, Veteran Owned Business, Enhanced Economic Competition, Changes Necessitated by Federal Budget Cutbacks, Business Restructuring from Federally Mandated Policies.