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V O L . X X I N O. X I V 32 FA C T BO O K / D O I N G B U S I N E S S I N M A I N E B U S I N E S S R E S O U R C E S Freeing the power of you. 207.623.1110 | www.allumbaugh.com Forget multiple insurance brokers, employee wellness programs, benefits, billing, regulatory compliance and COBRA. You simply want to be able to focus on what your business does best. The Allumbaugh Agency is a unique partner with a passion for the innovative looking to provide comprehensive, integrated benefit solutions, freeing the power of you. PORTLANDGLASS.COM PORTLANDGLASS.COM municipalities, and situations where the business or its owners previously failed to repay a federal loan or feder- ally assisted fi nancing, or are delin- quent on existing federal debt. e third eligibility factor is use of proceeds. A Basic 7(a) loan can provide proceeds to purchase machin- ery, equipment, fi xtures, supplies and to make improvements to land and/or buildings that will be occupied by the subject applicant business. Proceeds can also be used to expand or renovate facilities; acquire machinery, equip- ment, furniture, fi xtures and leasehold improvements; acquire businesses; start businesses; for working capital; acquire land or build a location; or to refi nance debt under certain conditions. SBA 7(a) loan proceeds cannot be used for making investments, provid- ing funds to any of the owners of the business except for ordinary compen- sation for actual services provided; for fl oor-plan fi nancing; or for a purpose that does not benefi t the business. e fourth factor involves a variety of requirements such as SBA's credit elsewhere test where the personal resources of the owners need to be checked to see if they can make a con- tribution before getting a loan guaran- teed by the SBA. It also includes the SBA's anti-discrimination rules and limitations on lending to agricultural enterprises because there are other agencies of the Federal government with programs to fund such businesses. Special purpose 7(a) loan programs e 7(a) loan program is the most fl ex- ible of the SBA's lending programs. Over time, the SBA has developed sev- eral variations of the basic 7(a) loan in order to address specifi c fi nancing needs for particular types of small businesses or to give the lender greater fl exibility with the loan's structure. e general distinguishing feature between these loan types is their use of proceeds. ese programs allow the proceeds to be used in ways that are not otherwise permit- ted in a basic 7(a) loan. SBAExpress e SBAExpress loan or line of credit is a fl exible smaller loan up to $350,000 that a designated lender can provide to its borrower using mostly their own forms, analysis and procedures to process, structure, service, and disburse this SBA-guaranteed loan. When structured as a term loan the proceeds and maturity are the same as a basic 7(a) loan. When structured as a revolv- ing line of credit, the requirements for the payment of interest and principal are at the discretion of the lender and maturity can't exceed seven years. CAPLines e CAPLines program for loans up to $5 million is designed to help small businesses meet their short-term and cyclical working capital needs. e pro- grams can be used to fi nance seasonal working capital needs; fi nance the direct costs of performing certain construc- tion, service and supply contracts, subcontracts, or purchase orders; fi nance the direct cost associated with com- mercial and residential construction; or provide general working capital lines of credit. e maturity can be for up to 10 years except for the builders' CAPLine, which is limited to 36 months after the fi rst structure is completed. Guaranty percentages are the same as for a basic 7(a) loan. There are four distinct short term loan programs under the CAPLine umbrella: 1. The Contract Loan Program is used to fi nance the cost associated with contracts, subcontracts, or purchase orders. Proceeds can be disbursed before the work begins. If used for one contract or subcon- tract, it is generally not revolving; if used for more than one contract or subcontract at a time, it can be revolving. e loan maturity is usu- ally based on the length of the con- tract, but no more than 10 years. Contract payments are generally sent directly to the lender but al- ternative structures are available. 2. The Seasonal Line of Credit Program is used to support buildup of inventory, accounts receivable or labor and materials above normal usage for seasonal inventory. e business must have been in business for a period of 12 months and must have a defi nite established seasonal pattern. e loan may be used over again after a "clean-up" period of 30 days to fi nance activity for a new season. ese loans also may have a maturity of up to fi ve years. e business may not have another seasonal line of credit outstanding but may have other lines for non- seasonal working capital needs. 3. The Builders Line Program provides fi nancing for small contractors or de- velopers to construct or rehabilitate

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