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California Loan Guarantee Program
Another way Valley Small Business Development Corporation is stimulating economic development is by guaranteeing loans made by local lenders under the California Loan Guarantee Program. The California Loan Guarantee program enables a small business to obtain a term loan or a line of credit from a lender when it cannot otherwise qualify for a loan. We are one eleven Financial Development Corporations (FDC’s) approved by the State of California, Business, Transportation & Housing Agency, to issue guarantees on their behalf. This program is not related to any SBA loan program.
Process For Applying For A Guarantee
The best way to get started is to contact Valley and ask to discuss your request with a loan officer. That way you can make sure that the request meets the basic guidelines of the program and you can discuss any issues prior to moving forward. The loan officer will review the information we need to process and analyze the request.
Approval Process
Most “completed loan packages” will be processed within two weeks. During that time, they are reviewed by VSBDC staff, submitted to Loan Committee, and the VSBDC Board. Once approved, the Guarantee Documents are mailed to the Lender.
Activation Guarantee
- Once the Guarantee Documents are received, the Lender must review them in order to comply with any additional conditions and/or requirements set forth by VSBDC.
- If acceptable, Lender is to sign and date all documents.
- Once the loan is closed and all requirements of the Guarantee Documents are met, Lender will remit only the following documents as a Certified Lender:
- Executed guarantee documents (no Lender documents required)
- Executed Lender’s Certification
- Check for appropriate loan fee
- Executed VSBDC loan application, if not submitted with the original package
PLEASE NOTE: Loan fees are calculated at 2% of the guaranteed liability. For example: | Loan of $100,000 | $100,000 | | Requested 90% guarantee | x .90 | | Loan Fee - 2% | $90,000 | | Doc Fee - $250 | x .02 | | Loan Fee | $1,800 | | Doc Fee | $250 | | Total Fee | $2,050 |
Participating LendersThe following is a list of lenders who participate in the California Loan Guarantee Program:
If you are a lender and want to know more about the California Loan Guarantee Program, please contact Rich Mostert, Commercial Loan Officer (
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).
In addition, Valley Small Business Development Corporation has active working relationships with the following banks:
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