Small Business Loan Guaranty Program

• Authorized to conduct business in Louisiana and maintains an office in Louisiana
• Small businesses with 500 employees or less
• For loans of $100,000 or less, must be at least one new permanent job created or one retained job
• For loans over $100,000, must be at least two new permanent jobs created or two retained jobs
• Funding requests for an eligible business purpose includes, but is not limited to, start-up costs, working capital, business procurement, franchise fees, equipment, inventory, as well as the purchase, construction, renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes. The definition of business purpose excludes activities that relate to acquiring or holding passive investments such as commercial real estate ownership, the purchase of securities; and lobbying activities as defined in Section 3(7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as amended.

Ineligible businesses and purposes:

• Restaurants,  grills, cafes, fast food operations, motorized vehicle, trailer, curb-side, sidewalk or street vender food operations that have been in business less than 2 years
• Bars, saloons and other businesses established for the principal purpose of selling or distributing alcohol
• Gaming or gambling
• Pyramid sales
• Financial services
• Speculative real estate
• Owner to owner buyouts
• Refinancing 

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.

• View the Titles of the Louisiana Administrative Code
• Rules for the SSBCI Loan Guaranty ARPA 2021 can be found in Part VII, Subpart 1, Chapter 5.

• Contact a participating lender (see list in the tab below) and request an SBLGP application.
• Lender will contact LEDC for qualification and submit a complete application, financial analysis (to include but not limited to collateral, equity, cash flow), proposed structure and commitment.
• The LEDC staff will evaluate the loan application, review the bank's credit analysis and then make recommendations to the appropriate LEDC approval body.
• The lending institution and applicant will be notified of the loan guaranty decision after review of the application packet by the appropriate LEDC committee/board.

Any insured bank, insured credit union or insured community development financial institution in the State of Louisiana may participate in the SSBCI Small Business Loan Guaranty Program by formally opting in to the program. At this time, no insured bank, insured credit union or insured community development financial institution has been confirmed. LED is actively canvassing to recruit qualified participants into the program. If you have an interest in learning how to become a SBLGP provider, please email your inquiry to LED at LEDSSBCI2@la.gov. Upon completion of the opt-in process, participating lender names, points of contact and website links will be posted here.

• Participating lenders TBD

Lenders wishing to opt-in to SSBCI’s SBLGP program may contact LED for more information by emailing LEDSSBCILoangty@la.gov  or calling 833.457.0531.

Q: What is a loan guaranty?
A: A loan guaranty is not a direct loan or grant. A guaranty program helps facilitate the access to capital for small business owners that are having trouble qualifying for a traditional business loan. If a bank is unwilling to lend money due to high risk or strict credit policies, LED may agree to guaranty your loan. This guaranty significantly reduces the banks risk, in return the bank is more willing to give your business a loan. However, the business owner is still required to meet the bank’s lending requirements.

Q: How can I get a loan for my small business?
A: Currently, Louisiana Economic Development does not offer a direct lending program. LED offers a Small Business Loan Guaranty Program. If you are seeking a loan, please contact your local financial institution to apply for a commercial loan.

Q: What are the programs credit requirements?
A: The Small Business Loan Guaranty requirements are similar to the standard lender underwriting requirements.

• 15% Equity
• Collateral (excluding a personal residence)
• Cash Flow Ratio of 1.25 to 1.00

Q: Does the borrower initially contact the bank or lending institution to apply for a guarantee? 
A:The borrower is required to contact the bank or lending institution directly to apply. The lender then works directly with LEDC.

Q: How long does the process take? 
A: It takes anywhere from one to three weeks to process a guaranty. The specific length of time is determined by the loan amount and approving body; for example, internal loan committee or LEDC Board of Directors.

Q: What types of financing are eligible in the Small Business Loan and Guaranty Program?
A:

• Revolving Lines of Credit
• Startups
• Acquisitions
• Fixed assets purchases
• Purchase or construction of building (limited to 51% applicant occupancy)

Q: What types of businesses and purposes are not eligible in the Small Business Loan and Guaranty Program? 
A:

• Restaurants that have been in operations less than 2 years
• Bars and saloons
• Gaming businesses
• Real estate speculations
• Recreational, theme or amusement parks
• Parks or camping facilities
• Pyramid sales
• Funding activities related either directly or indirectly to cryptocurrency
• Refinancing