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Cox Padmore Skolnik & Shakarchy LLP remains ready to serve you during the COVID-19 pandemic. We are prepared to provide you with continuous legal service and uninterrupted communication. We are also monitoring the legal impact of COVID-19 and we are available to discuss any questions you may have regarding the CARES Act, insurance coverage issues, including business Interruption insurance, or other issues. Please see below for a list of our practice areas. You may contact us by the usual means of telephone and email, which is encouraged at this time. We will promptly respond. Video conferencing is also available. In all, our firm remains committed to assisting you throughout this evolving period of legal, business, and safety concerns.

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  4.  | Is my business eligible for a 7(a) Loan?

Is my business eligible for a 7(a) Loan?

| Nov 11, 2014 | Entrepreneurs

Small business owners in New York may be able to procure much-needed funds through a 7(a) loan guaranteed by the U.S. Small Business Administration. While each applicant is individually assessed, some general requirements apply.

In order to qualify for a 7(a) loan, the business must be considered small, meaning that it can be a start-up or other business that has fewer than 500 employees for most manufacturing and mining industries and less than $7 million in average annual receipts for most non-manufacturing industries. Additionally, the entity must be for-profit and must do business in the United States. Before an applicant can apply for a 7(a) loan, he or she must show that other financial resources have already been used, such as personal assets, and that there is a need for the loan proceeds that should be linked to some sound business purpose.

Certain businesses are not eligible for these types of loans, including financial institutions, payday lenders, life insurance companies, foreign businesses, governmental entities, religious schools, loan packagers who receive one-third or more of their annual revenue from selling SBA loans, businesses engaged in lobbying activities and businesses that derive at least one-third of annual gross revenue from gambling. Additionally, if the business owner caused the government to suffer a monetary loss because of a previous business debt or if 20 percent or more of the business is owned by a person who has been indicted for a felony or a crime involving moral depravity, the business is not eligible.

Because every loan situation is unique, individuals who would like to learn more about their eligibility for certain loans may first discuss available options with an attorney who has experience in business and commercial law. The SBA loan program can be a good source of financing for start-up companies that are also seeking equity investments.

Source: U.S. Small Business Administsration, “7(a) Loan Program Eligibility“, November 10, 2014

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