SBA Expands Access to Key Loan Programs

The Small Business Administration (SBA) has announced expanded access to the 7(a) Working Capital Pilot and the 504 loan programs.  Investment capital and affordable credit continues to be a major impediment to growing a legal and well-regulated hemp crop and this development is in line with a key Minnesota Industrial Hemp Association (MIHA) priority.  

If hemp, and derivatives thereof, fall within the legal definition as provided in the Agriculture Improvement Act of 2018 (Public Law 115-334), then the crop should be eligible for credit, research, economic development, and rural development purposes.

The 7(a) Working Capital Pilot program is designed to help small businesses access the working capital they need.  Key features include:

Credit Lines: The program offers short-term credit lines ranging from $500,000 to $5 million with a 75% guaranty to cover cash flow gaps and support growth.

Asset-Based Lending: Businesses can borrow against their accounts receivable and inventory, making it easier to manage cash flow.

Transition Support: The program also assists borrowers in transitioning from SBA Express loans to larger working capital facilities.

Flexibility: It provides greater flexibility compared to other SBA loan options, catering to a wider range of small business owners.

The 504 loan program is designed to finance large fixed assets such as land, buildings, and heavy equipment. The 504 program is a zero-subsidy initiative, meaning it operates without ongoing taxpayer funding and is supported by fees paid by borrowers and lenders. It provides long-term, fixed-rate financing up to $5.5 million, with 10- to 25-year repayment terms.

Please feel free to contact me directly if you have any questions or would like additional information.

Dave Ladd, President

Minnesota Industrial Hemp Association

(651) 247-5458 - Mobile

Email: info@mnindustrial.com

Website: mnindustrialhemp.com

Join MIHA here

The Minnesota Industrial Hemp Association (MIHA) is a broad coalition of businesses and individuals who advocate for the re-emerging industrial hemp sector from field to consumer.

Contributions are generally not deductible as charitable contributions for federal income tax purposes. They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer’s business. No goods or services were provided in exchange for your contribution. MIHA cannot accept contributions from the cannabis industry or the sale of cannabis (including medicinal marijuana).