CAPLine legislation adjusted

11/7/2011

The Small Business Administration's CAPLines program is an umbrella SBA loan initiative aimed at assisting small businesses with short-term and cyclical working-capital needs, according to the SBA's website.

Recently, the SBA modified its CAPLine program to further assist small businesses "manage their cash cycle, scale up and create jobs."

The changes were based on conversations between Steve Smits, SBA associate administrator for capital access, and more than 200 leading lenders across the country. Smits worked with both lenders and small businesses to produce agreeable changes.

"They've taken a program that we know is important to our clients and figured out how to make it work better, and for more small businesses," said Bridget bean, SBA district director for the Washington Metro area.

Under the new rules, small companies have gained certain benefits. They can now borrow against purchase orders to pay for labor, no longer have to pledge all available assets and subcontractors can now obtain an SBA-guaranteed line of credit to finance a federal or private contract.

In order to guarantee a CAPLine loan, an pepople must be able to show at least 20 percent ownership in their businesses, according to the SBA's website.