Tag Archives: SBA 7a

The Government Shutdown and Your Loans

The government is currently “shutdown”. How does this affect your current and future loans?

Current loans and the government shutdown:

  • If you have current loans with government agencies like the Small Business Administration, the SBA is still servicing these loans.
  • You can continue to make payments and can even make some changes (like in ownership). But you cannot modify any loan amounts at this time.
  • Please be sure that you continue to keep your EIDL loan current, even during the shutdown, as this affects your ability to seek future financing. You can use this link to confirm your EIDL status: Check here

Trying to Get a New Loan during the Government Shutdown?

  • If you are in the middle of an SBA loan application and your lender pulled the PLP number, your loan should not be delayed. The PLP number is an SBA-specific loan number and provides pre-approval status.
  • If you don’t yet have this pre-approval, your loan will be paused.
  • However, your lender will continue to underwrite your loan. You should continue to submit all requested documents so you are making progress.
  • But the SBA will not underwrite or approve new loans during the government shutdown.
  • If you are seeking financing because of a maturing note, we urge you to contact your current lender. Explain that you may need an extension because of the shutdown, which is beyond your control.
  • If you do obtain an extension, be realistic and patient. Even when the government shutdown ends, approvals will not begin immediately. There will be a backlog of work. Allow for a longer approval process.

GRP President Rick Patel and Managing Director Krishan Patel both have worked through government shutdowns before. They know that they can be frustrating, but with patience and planning, loans cans still close, even if slightly delayed. GRP Capital can help you as you negotiate with current lenders, satisfy sellers and guide you through the process.

Whether you’re purchasing, refinancing, or building from the ground up, our extensive network of lenders ensures you’ll find funding that aligns with your goals and cash flow needs.

Here’s what sets us apart:

  • We save you time by researching and identifying the best funding options for your project.
  • Our expertise spans various loan products—including non-recourse loans, SBA loans, bridge loans, and conventional financing—so you can navigate even the most complex transactions confidently.
  • Beyond lending, we provide strategic guidance on operational decisions that drive long-term business success.
Meeting from above

SBA Launches Working Capital Loan

The Small Business Administration has just announced a brand new working capital loan program. This program will be administered as a 7a loan. Although the SBA has not announced a start date, the official launch of the loan could occur as early as third quarter 2024.

The name of the pilot program is the Working Capital Pilot Program (WCP). The goal is to provide lines of credit to small business owners. The SBA particularly wanted to create this financing option during the current extended high rate environment.

According to the SBA’s press release, “This pilot program represents a significant expansion of the SBA’s loan programs by adding a line of credit product with an innovative fee structure engineered to increase flexibility for small businesses and lenders, providing more options when structuring a line of credit to meet businesses’ specific needs.”

What we Know about the Working Capital Loan Program:

• Competitive Rates for a Line of Credit: This loan can be utilized for short-term capital injections. As a result, the loan should help increase profitability or jump start a new aspect of a business. The shorter team loans and flexible designs should be enticing to many entrepreneurs.

• Flexibility: The WCP offers greater flexibility than other SBA 7a offerings in terms of maturity date and loan terms.

• Asset Based Financing : The WCP will offer a line of credit, based upon the assets of the small business. This should enable business owners to manage cash flow and to also deal with any snags in supply chains.

• More guidelines are forthcoming: The SBA is offering one-on-one consulting to lenders to help educate their personnel first about the advantages and details of the WCP. GRP Capital expects to be able to recommend these loans after a short study period with our lending partners.

• Using Valued Lender Partners: In order to access this working capital loan, we will need to engage with experienced lenders in the SBA marketplace. These lenders are already in contact with our GRP Capital team. Together we are determining the best usage of this new financing option.

• Annual Guaranty The loan will include an upfront SBA guaranty. Borrowers can pay this guaranty annually.

Our GRP Capital team specializes in finding the right lender for each project. We save our clients time and money, as we research the best choices for their funding sources. Our experience allows our clients to find funding that is project-appropriate and will allow for sufficient cash flow. Whether you are looking to refinance or purchase or engage in construction, we would love to discuss your business plans with you. If you are considering becoming a first-time (or second or third time!) buyer, we can assist you.