Community Advantage Small Business Loan Program
HOPE is excited to be an authorized lender for the Small Business Administration’s Community Advantage Program. These loans are intended to increase access to credit for small businesses located in underserved areas.¹ It also provides management and technical assistance as needed to help companies be successful.
Program Highlights
Fixed Asset Financing
- Maximum Loan Size: Up to $250,000²
- Maximum Interest Rate: Up to Prime + 6%
- Maximum Terms:
- Up to 10 Years for Working Capital
- Up to 10 Years or Useful Life of Machinery and Equipment
- Up to 25 Years for Real Estate
- No Pre-payment Penalties
Eligible Businesses – To qualify for this program, businesses must meet the following criteria:
- For-profit
- Located in Alabama, Arkansas, Louisiana, Mississippi, or Tennessee
- Fit the SBA Definition of a Small Business
- Minimum Personal Credit Score of 600 (with acceptable explanation for any derogatory marks for principal borrower)
- Demonstrate a need for the requested financing
Use of funds
- Purchase of New or Existing Commercial Buildings (Owner-Occupied)
- Purchase Machinery, Inventory, Equipment, and Fixtures
- Debt Refinance
Cash Flow
- Debt service coverage ratio must be equal to or greater than 1.15 on a historical and/or projected cash flow basis to cover existing and proposed debt.
- Underwriting will identify and include all reasonable add backs provided they can be documented.
Collateral Coverage
- When loan proceeds are used to purchase assets, a first lien position in those assets must be obtained.
- When loan proceeds will be used to refinance existing debt, the loan must be secured with the same collateral.
- SBA requires one-to-one coverage on collateral.
- Other conditions apply.
Ineligible Businesses
- Businesses Engaged in Lending
- Passive Businesses
- Life Insurance Companies
- Businesses Engaged in Legal Gambling
- Businesses Engaged in Any Illegal Activity
- Businesses Which Restrict Patronage
- Government-Owned Entities
- Businesses Engaged in Promoting Religion
- Owner Incarcerated, on Probation or Parole or Currently Subject to Indictment
- Business That Have Ever Defaulted on Federal Debt
If you are interested in obtaining a Community Advantage loan with HOPE, please complete the following form and a HOPE representative will contact you to begin the application process.
¹Loans subject to credit approval.
²Larger loans available through our Commercial Lending department.