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U.S. Small Business Administration (SBA) Finance Programs

Though the SBA does offer a variety of guaranteed loan programs, the agency has no funds for direct lending or grants.

SBA’s Loan Guaranty Programs

The 7(a) Loan Guaranty Program provides short- and long-term loans to eligible, credit-worthy start-up and existing small businesses that cannot obtain financing on reasonable terms through normal lending channels. The SBA provides financial assistance through its participating lenders in the form of loan guaranties, not direct loans. SBA does not provide grants for business start- up or expansion. Loans under this program are available for most business purposes, including purchasing real estate, machinery, equipment and inventory, or for working capital. The loans cannot be used for speculative purposes. The SBA can generally guarantee a maximum of $2 million under the 7(a) program. The guaranty rate is 85 percent for loans of $150,000 or less, 75 percent for loans greater than $150,000, and 90 percent for loans made under the Export Working Capital Program. Generally the interest rate cannot exceed 2.75 percent over the prime rate as published in The Wall Street Journal, except for loans under $50,000, where the rates may be slightly higher. Maturity may be up to 7 years for working capital, 10 years for equipment and up to 25 years for fixed assets. Contact a commercial lender or the SBA’s Colorado District Office for more information on the following programs.

  • 504 Certified Development Loan Program
    The “504” Program provides long-term, fixed-rate financing to small businesses to acquire real estate or capital machinery and equipment to expand or modernize. Typically, at least 10 percent of the project is provided by the borrower, at least 50 percent under a commercial loan by a lender, and the remainder provided by an SBA-guaranteed debenture. The maximum SBA debenture is generally $2 million. This program is delivered through Certified Development Companies(private, nonprofit corporations established to contribute to the economic development of their communities or regions). Contact the SBA’s Colorado District Office for more information.
  • SBA Express, a 7(a) Loan Program
    This program encourages lenders to make more small loans to small businesses. Participating banks use their own documentation and procedures to approve, service and liquidate loans of up to$250,000. In return, the SBA agrees to guarantee up to 50 percent of the loan.
  • CAPLines, a 7(a) Loan Program
    This program finances the short-term and cyclical working-capital needs of small businesses. Under CAPLines, there are five distinct short-term working-capital loans: seasonal, contract, builders, standard asset- based and small asset-based lines. For the most part, the SBA regulations governing the 7(a) Loan Guaranty Program also apply to CAPLines. The SBA generally guarantees up to a maximum of $1million under the program.
  • Export Working Capital Program (EWCP), a 7(a) Loan Program
    This program enables the SBA to guarantee up to 90 percent of a secured loan, or $1 million whichever is less. Loan maturity may be for up to three years with annual renewals. Loans may be for single or multiple export sales and may be for pre- shipment working capital, post-shipment expo-sure coverage or a combination of the two. Proceeds may only be used to finance export transactions. This program targets export-ready small businesses. Contact the SBA for more information.
  • International Trade Loan (ITL), a 7(a) Loan Program
    This program offers long-term financing to small businesses engaged or preparing to engage in exporting, as well as to small businesses adversely affected by import competition. The SBA may guarantee up to $1.25 million for a combination of fixed-asset financing and working capital. The working capital portion cannot exceed $750,000. Contact the SBA for more information.
  • SBA Export Express, a 7(a) Loan Program
    Small business exporters may now obtain loans of up to$250,000 through the lender-expedited SBA Express program, with SBA guaranteeing 75-85% of the loan amount. Loan proceeds may be used for buildings, equipment, other fixed assets, foreign trade show costs, translating company literature, export transaction costs, or other working capital needs. Applicants must have been in business for a least one year and must demonstrate that the loan will help the firm enter a new export market or expand in an existing export market. Contact SBA for more information.
  • MicroLoan Program
    This program provides short term loans for up to $35,000 to small businesses for working capital or the purchase of inventory, sup- plies, furniture, fixtures, machinery and/ or equipment. Proceeds cannot be used to pay existing debts or to purchase real estate. Loans are made through SBA approved nonprofit intermediaries. These intermediaries also receive SBA grants to provide technical assistance to their borrowers. For a list of micro-lenders in Colorado, contact the SBA’s Colorado District Office.

CHFA

CHFA has been helping businesses access capital since 1982, and we are a trusted resource for the business community. We collaborate with a variety of lenders to offer innovative financing to help your business reach its full potential.

commercial real estate loans

CHFA provides financing for growth and expansion. CHFA commercial real estate loans may be used to acquire real estate, expand an existing facility, and/or rehab an existing or new facility. Loan proceeds may also be used to acquire capital equipment.

  • Up to 90 percent financing in rural areas
  • 20-year loan term with fixed interest rates
  • Low down payment requirements

Program Eligibility:

  • At least 51 percent owner-occupied
  • Three or more years of operating history

Brownfields Revolving Loan Fund

Brownfields Revolving Loan Fund, a newly established partnership between CHFA, and the EPA, the Colorado Department of Health and Environment, and several municipalities throughout the state whereby funds are pooled by the partners and used to finance cleanup of environmentally contaminated commercial properties for future reuse or redevelopment. Financing terms include below market rates, flexible loan terms and creative loan structures. CHFA serves as the fiscal agent for the fund. For more information on CHFA’s loan programs, contact the Colorado Housing and Finance Authority, 1981 Blake St., Denver, CO80202.

Community Development Block Grants (CDBG):

These grants are provided to the State of Colorado by the U.S. Department of Housing and Urban Development (HUD). In turn, OEDIT uses these funds to assist rural communities with their economic development efforts. Businesses receiving CDBG assistance are required to create or retain jobs for low- and moderate- income persons. In some situations, businesses may be eligible if the owner of the business is of low- to moderate- income and the business qualifies as a microenterprise. OEDIT uses these funds to further economic development in two ways. First, the CDBG Infrastructure Program in sup- port of a specific business or businesses. Local government-sponsored projects may generally receive infrastructure grants of up to $500,000. Local matching funds may be required. Second, OEDIT provides financial resources to 15 regional Revolving Loan Funds (BLFs), which use the funds to make loans to businesses within their service areas. The BLF programs are available locally, each with its own loan review committee and Board of Directors. The BLFs have considerable flexibility to make small loans from a few thousand dollars up to $250,000. In some cases, loans greater than $250,000 have been approved. For both the Infrastructure and BLF Programs, applicants can be existing or start-up businesses. OEDIT and, when appropriate, the Governor’s Financial Review Committee reviews and approves all requests for funding.

NOTE: The stat’s CDBG program does not cover any of the metropolitan areas of Colorado (known as “entitlement” areas), because those areas receive their own allocation of CDBG funds directly from HUD. For more information on the CDBG programs, please contact OEDIT’s Finance Staff, or for loans, contact the BLF in your service area directly (see BLF listings).

Venture Capital Authority (VCA)

The Colorado Venture Capital Authority (VCA) was established in 2004 to make seed- and early-stage capital investments in businesses. The VCA was allocated $50 million in premium tax credits, which it subsequently sold to insurance companies. The VCA selected fund manager High Country Venture, LLC, and established Colorado Fund I and Colorado Fund II, each with approximately $25 million.

High Country Venture is independently operated and generally makes funding decisions. State approval is limited to ensuring that businesses receiving funding meet minimum specified requirements. The minimum and maximum investment size generally ranges from $250,000 – $3.375 million.

Per the VCA Statute, the VCA is intended to manage the money as an evergreen fund; meaning, that the distributions received from Colorado Funds I & II are to be reinvested in future venture capital funds that meet the requirements of the VCA Statute. Accordingly, in 2018, the VCA invested proceeds from CO Funds I & II into a third fund, the Greater Colorado Venture Fund.

Opportunity Zones

Opportunity Zones were enacted as part of the 2017 tax reform package (Tax Cuts and Jobs Act) to address uneven economic recovery and persistent lack of growth that have left many communities across the country behind. In the broadest sense, the newly enacted federal Opportunity Zone (OZ) program provides a federal tax incentive for investors to invest in low-income urban and rural communities through favorable treatment of reinvested capital gains and forgiveness of tax on new capital gains.  In Colorado, Opportunity Zones may help address a number of challenges:

  • Promoting economic vitality in parts of the state that have not shared in the general prosperity over the past few years
  • Funding the development of workforce and affordable housing in areas with escalating prices and inventory shortages
  • Funding new infrastructure to support population and economic growth
  • Investing in startup businesses that have potential for rapid increases in scale and the ability to “export” outside the state of Colorado
  • Upgrading the capability of existing underutilized assets through capital improvement investments

This economic and community development tax incentive program provides a new impetus for private investors to support distressed communities through private equity investments in businesses and real estate ventures. The incentive is deferral, reduction and potential elimination of certain federal capital gains taxes. U.S. investors currently hold trillions of dollars in unrealized capital gains  in stocks and mutual funds alone— this is a significant untapped resource for economic development. Opportunity Funds provide investors the chance to put that money to work rebuilding the nation’s distressed communities. The fund model will enable a broad array of private equity fund managers and investors to pool their resources, increasing the scale of investments going to under-served areas.