SBA's 7(a) lines of credit for short-term operating needs, in four types: Working Capital, Contract, Seasonal and Builders. The most for one line is $5,000,000.
CAPLines finance cyclical, recurring or other identifiable short-term operating needs, revolving or not. A Working Capital CAPLine needs a business that generates accounts receivable (not notes) or holds inventory. A Contract CAPLine finances the costs of specific contracts, with no profit and no permanent working capital. A Seasonal CAPLine needs at least 12 calendar months in business and a definite seasonal pattern, and finances the build-up of receivables and inventory. A Builders CAPLine lets a small general contractor build or rehabilitate property for sale.
The maximum is $5,000,000. The term is up to 10 years for the first three types, and up to 60 months plus the construction time for Builders. Every line needs an exit strategy, and interest-only payments cannot run past the borrower’s cash cycle, season, contract or project. A line of $50,000 or less needs no collateral. A Working Capital line disbursed on a borrowing base needs a first lien on receivables and inventory; without one, the lender assumes full use of the line and secures it 1 to 1.
Without a borrowing base, the lender may size a Working Capital line from sales. Example: prior-year net sales of $3,650,000 divided by 365 is $10,000 a day. For a 60-day sales cycle, estimated working capital need is $600,000.
How it shows up in the data here
In the SBA file, ProcessingMethod shows the type: STC for the Working Capital line, CTR Contract, SLC Seasonal and SGC Builders. RevolverStatus marks a revolving line, 1, against a term loan, 0. A lender page counts CAPLine loans, and the lender search can filter for lenders that made any.
Go further
- Lenders with CAPLines loans: Lenders that made any CAPLines in the 36-month window.
- SBA 7(a) payment calculator: Monthly payment with the FY2027 upfront guaranty fee, with the fee paid in cash or added to the loan.
- SBA 7(a) loan package checklist: A 7(a) package is the bank's usual file plus SBA's own list. Know which items SBA requires and you can have them ready before the first call.
Related terms
- SBA 7(a) loan: SBA's main business loan program. A lender makes the loan and SBA guarantees part of it: up to 85 percent of $150,000 or less and 75 percent of more, on loans up to $5,000,000.
- SBA Express loan: A 7(a) loan of $500,000 or less that only a lender with SBA Express authority can make, on its own credit decision, with a 50 percent SBA guaranty.
- SBA collateral requirements (7(a)): SBA's rules for what a 7(a) lender must take as collateral and how each asset counts, such as improved real estate at 85 percent of value. A request must not be declined only for thin collateral.
- SBA guaranty percentage: The share of a 7(a) loan that SBA guarantees to the lender: up to 85 percent of a loan of $150,000 or less, up to 75 percent of a larger loan, and 50 percent on SBA Express.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.