California IBank Small Business Loan Guarantee Program

IBank’s Small Business Finance Center features a loan guarantee program designed to assist small businesses that experience capital access barriers. The Small Business Loan Guarantee program encourages lenders to provide funds to small businesses to help them grow and prosper.

IBank’s loan guarantees can pay lenders up to 80% of a small business’s outstanding loan in the event that small business is unable to pay. By guaranteeing loans, IBank gives lenders the confidence they need to issue loans to small businesses that otherwise struggle to access capital.

Eligible uses of the Small Business Loan Guarantee program financing proceeds include start-up costs, construction, inventory, working capital, business expansion, agriculture, lines of credit and more.

• Eligible applicants include small businesses with 1-750 employees.

• Credit qualifications are based on lender criteria.

• The business must have between 1-750 employees and be established as an entity including:

• Sole Proprietor – Individual using legal name as business name that files a Schedule C, Schedule F, or has a fictitious business name or DBA statement

• Limited Liability Company

• Cooperative

• Corporation

• Partnership

• S-Corporation

• Not-for-profit

• IBank will not accept an individual as the borrower. It is permissible for an individual to be a guarantor or co-borrower on the loan, but the primary borrower must be a small business.

• IBank does not consider citizenship or immigration status for eligibility requirements, as long as the entity/individual meets the above criteria.

• The business activity must be eligible under the program and in one of the industries listed in the North American Industry Classification System (NAICS) codes list

• $20M max loan amount

• Loan proceeds must be used in California

• 80% or $5M (whichever is less) outstanding loan guarantee liability per business, including affiliates

• Guarantees may be for a maximum of seven years.

• Interest rate and qualifications determined by each lender

• Guarantees up to $2.5M: 2.5% of the guarantee amount

• Guarantees above $2.5M: 2.5% of the guarantee amount up to $2.5M; plus 2.25% of the guarantee amount above $2.5M

• $250 loan documentation fee

• Loans can be term loans or lines-of-credit, short-term or long-term, have fixed or variable rates, be secured or unsecured, and bear any type of amortization schedule.

• The duration of a Loan Guarantee shall not exceed seven (7) years, except for a Line of Credit Loan to a Farm Enterprise, where the duration of a Loan Guarantee shall not exceed the term of the current Farm Borrower Agreement and in no event seven (7) years.

Small businesses can contact the Financial Development Corporations serving their area or reach out to one of the lenders serving their area. One of seven Financial Development Corporation (FDC) partners throughout the state can help provide technical assistance as well as process loan guarantees for qualifying small businesses.

New lenders can enroll in SBFC credit enhancement programs on an ongoing basis. Contact your lender and ask them to enroll.

SBFC Fact Sheet

List of Participating Lenders

Participating Lenders (FDC offices)

SBLGP Policy Manual