Seasonal Lines of Credit and Builders Lines under the CAPLine Program
The CAPLines Program under the Small Business Administration provides small businesses with the opportunity to get their hands on lines of credit which could be either fixed or revolving. These are intended to meet the short-term and cyclical working capital requirements of businesses. There are four different programs under SBA CAPLines, each one having its own SBA loan requirements and qualification standards. These are discussed below.
Seasonal Line of Credit
Business owners who qualify for SBA loans can access a seasonal line of credit to add to seasonal increases of inventory, labor costs, and accounts receivable. This is not supposed to be used during periods of low activity. Your business should have completed at least one year of operation. Furthermore, the line should be repaid at season’s end. The loan amount depends on cash-flow projections.
This is utilized for financing direct expenses of construction or renovation of commercial or residential buildings on resale. You need to be a contractor or a homebuilder with the required managerial and technical skills. Furthermore, you need to demonstrate your success in completing comparable projects. Renovations should comprise of at least a third of the property’s value, and there should be at least one supervising staff deployed at the site of the operation. There are further collateral needs such as a first or second lien on the property, or a release clause for the transfer of clear title to the possible buyer.