Both SSBCI and SBA 7(a) loans provide access to credit that is not available elsewhere to small businesses. Lenders look at cash flow, the owner’s investment in the business, quality of management, and collateral in their loan decision process. If there is a weakness in one of these areas, lenders will utilize either an SSBCI or an SBA guarantee to move forward on the loan request.

Cash flow is the most important factor, as both SSBCI and SBA guarantees require that the loan can be repaid from business operations. Simply put, cash flow is what is left over after all business expenses and owner’s living expenses are paid. This cash flow needs to be greater than the debt payments.

The owner’s investment in the business is also important. Lenders need this as it demonstrates that the owner has “skin in the game.” A reasonable investment in the business is also important as it keeps the business from borrowing too much and having an overwhelming debt service burden. Investment in the business is either how money is put in when starting up a business, or how much is kept in the business as it operates.

Management needs to demonstrate that it is competent and qualified to own and operate the business. This can be reflected in the historical operating results of the business or through prior education and work experience.

Collateral refers to the assets used to secure the loan. They will at least consist of the business assets. If they do not fully cover the loan, a personal guarantee that includes a second or third deed of trust on a home may be required. SBA and SSBCI loans will not be turned down if there is insufficient collateral.

An SBA guarantee is from the Small Business Administration, an agency of the federal government. The SBA will guarantee 75% of a loan up to $5,000,000. For loans of $150,000 or less, SBA will guarantee 85% of the loan.

The SBA will charge a fee for its guarantee. These fees are included in the loan and are:

• For loans of $150,000 or less: 2% of the guaranteed portion
• For loans of $150,001 to $700,000: 3% of the guaranteed portion
• For loans of $700,001 – $5,000,000: 3.5% of the guaranteed portion up to $1,000,000, plus 3.75% of the guaranteed portion over $1,000,000

All SBA loans are fully amortizing, which means there is no balloon payment allowed. The term of the loan is based upon the use of proceeds.

• Working capital, inventory loans, and business acquisition financing must not exceed 10 years.
• Equipment, fixtures, or furniture loans should also not exceed 10 years.
• Real estate loans can be up to 25 years.
• If debt is being refinanced, the loan term will be based upon the original use of proceeds of the debt being refinanced.

SSBCI guarantees are from the State of California Infrastructure and Economic Development Bank. SSBCI stands for State Small Business Credit Initiative. Federal dollars were provided that have grown into a large trust fund backing these guarantees.

• The maximum SSBCI guarantee is $5,000,000.
• The guarantee covers up to 80% of the loan, but if the lender accepts a lower percentage, the maximum loan amount increases to $20,000,000.
• The SSBCI guarantee fee is 2.5% of the first $2,500,000 of the guaranteed portion and 2.25% for any guaranteed portion above that.

The amortization of an SSBCI loan is determined by the lender, but the guarantee expires after 7 years. Both SBA loans and SSBCI loans require lender participation — the lender decides whether to extend credit using the guarantee. American Lender is both an SBA 7(a) lender and SSBCI lender.

Jim Ely

President of the Small Business Development Corporation of Orange County

Jim Ely is the Senior Advisor for American Lending Center’s government-guaranteed lending efforts. He successfully obtained non-federally regulated lending status for ALC to participate as an SBA 7(a) lender and helped ALC gain approval to provide SSBCI guarantees through the California Infrastructure and Economic Development Bank (IBank).

Jim is also the President of sbfdoc.org, the Small Business Development Corporation of Orange County, a financial development corporation that provides loan guarantees through IBank.

He began working with SBA loans in 1984 and now owns sbapro.com, a platform that helps banks and borrowers participate in the SBA 7(a) loan program.

Jim also serves as the Vice Chairman of California International Bank.

In 2015, Jim was recognized by the U.S. Small Business Administration as their Financial Services Champion of the Year.

About American Lending Center: A Financial Times (FT) Americas’ Fastest Growing Company

American Lending Center LLC (ALC), a mission-driven California-regulated lender, is a licensed SBA 7(a) and SSBCI lender. Together, ALCH and ALC have supported the creation or retention of over 140,000 jobs in the U.S. economy, underwriting impactful projects that foster economic growth. 

American Lending Center Holdings (ALCH) manages 14 EB-5 regional centers sponsoring projects across the United States. Since 2009, ALCH has raised EB-5 capital for over 100 projects in 31 states including I-956F approvals from USCIS of 28 projects. ALCH has been featured on the Inc. 5000 list of “Fastest-Growing Private Companies in America” for five consecutive years (2020–2024) and was also ranked among “America’s Fastest Growing Companies” by Financial Times in 2021, 2022, 2023 and 2025. 

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