What is the Community Advantage Loan Program? — SEDCO

In 2011, the US Small Business Administration (SBA) introduced the Community Advantage Loan program to help new and existing small businesses receive loans under $250,000. This program was designed to allow businesses in underserved communities to access funds for start-up costs, working capital, assets (such as machinery and equipment), real estate, and more.

The Community Advantage Loan program allows mission-focused, community-based financial institutions – such as Certified Development Companies like SEDCO – to offer loans to small businesses in need of capital. This not only helps businesses like yours succeed, but can help them grow and hire more people, giving the local economy a boost. That’s the Community Advantage!

The SBA provides backing for this program, guaranteeing 85% of loans up to $150,000 and 75% of loans greater than $150,000. According to the SBA, “Although a borrower must prove credit worthiness and the viability of the business idea: unlike traditional lending, qualification for this program is not limited by the size of the borrower’s balance sheet, or the amount of collateral involved.”

The Community Advantage Program offers an alternate way to access affordable credit to small businesses that may not qualify for traditional business loans.  Additionally, it provides SBA’s enhanced management and technical assistance services to help set up a business for long-term success.

Here are some quick facts about the SEDCO Community Advantage program:

  • Proceeds can be used for working capital, business acquisition, asset purchases, and start-up costs, such as land, building, machinery, and equipment

  • Loans may not be used for revolving lines of credit

  • Loan amounts are $25,000 up to $250,000

  • Variable interest rates

  • Loan maturity: Up to 10 years

  • No pre-payment penalties

A typical recipient of a Community Advantage loan includes small business owners in underserved markets who are just starting out or considering expansion. They have likely been in business for less than three years and are not eligible for traditional financing elsewhere.

If this sounds like you, we should talk and see if you qualify. To learn more, visit our Community Advantage Loan program page, visit our website or contact us today!