Government Loan Programs

Many borrowers find that their loan request does not meet the criteria of the credit-scored standard loan product of the larger financial institutions. Often these borrowers have certain financial issues that make it difficult to obtain conventional credit through smaller financial institutions. We work with various governmental agencies in order to provide a source of financing that is not available through conventional sources.

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UNITED STATES SMALL BUSINESS ADMINISTRATION ("SBA")
The SBA provides the following two primary loan programs:

SBA 7(a) Loan Guarantee Program Under this program, the government guarantees a portion of the loan made by the Bank. This guarantee may be up to 85% of the loan amount. Loan proceeds may be used for almost any purpose, such as working capital, acquiring inventory, equipment, and real estate. Proceeds can be used to finance a new business, acquire a business, or expand a business. Loan terms are usually longer than conventional financing, thereby minimizing the monthly loan payments. Furthermore, down payments are typically less.

SBA 504 Loan Program This program is used primarily to acquire real estate. The borrower is required to make a 10% to 15% cash injection, with the bank providing a 50% first deed of trust and the SBA provides a 35% to 40% second deed of trust. The SBA loan is fully amortized over 20 years at a fixed rate, normally below market.


Steve Mizuno Senior Vice President Manager Tracy 209-820-7924 smizuno@service1stbank.com	Frank Medo Vice President Relationship Manager Lodi 209-333-5002 fmedo@service1stbank.com

Dana Bagley Assistant Vice President Relationship Manager Stockton 209-644-7829 dbagley@service1stbank.com

UNITED STATES DEPARTMENT OF AGRICULTURE ("USDA")
The USDA offers programs for both agricultural and commercial borrowers. They are as follows:

FSA Loan Guarantee Program Under this program, the government guarantees a portion of an agricultural loan made by the bank. This guarantee may be up to 90% of the loan amount. Loan proceeds may be used for almost any agricultural purpose, such as production lines of credit, developmental loans, and acquiring equipment and real estate. Loan terms are usually longer than conventional financing, thereby minimizing the monthly loan payments. Furthermore, cash injection requirements are typically less.

B & I Loan Guarantee Program This program is very similar to the SBA 7(a) loan guarantee program, except it is for businesses in rural area (populations of less than 50,000). Under this program, guarantees can be as high as 90%; and loan amounts can be substantially larger than under the SBA program. Loan purposes and loan terms are similar to the SBA loan guarantee program.

Steve Mizuno
Senior Vice President
Manager
Tracy
209-820-7924
smizuno@service1stbank.com

STATE OF CALIFORNIA
The State of California also provides several loan programs that may benefit a small business. The primary program is:

State Loan Guarantee Program This program is very similar to the SBA 7(a) loan guarantee program, except that real estate financing does not qualify. This program is typically more beneficial for smaller loans and lines of credit.

Frank Medo
Vice President
Relationship Manager
Stockton
209-644-7806
fmedo@service1stbank.com