State Guarantee
The California Loan Guarantee Program enables a small business to obtain a term loan or line of credit when it cannot otherwise qualify for a loan. The program provides a lender with the necessary security, in the form of a guarantee, to approve a loan or line of credit facility. The guarantees are issued on behalf of the State by the San Fernando Valley Financial Development Corporation (SFV-FDC). SFV-FDC primarily services the Northern Los Angeles and Eastern Ventura Counties but may service any request within the State of California.
Program Highlights:
| Eligible Applicants | 500 employees or less |
| Eligible Use of Proceeds | Must be for any standard business purpose beneficial to the applicant’s business, such as expansion into new facilities, working capital, debt refinance or for the purchase of new equipment. |
| Maximum Guarantee Amount | $1,000,000, or up to 80% of the loan amount, whichever is less. The guarantee’s percentage may vary and is subject to negotiation between the SFV-FDC and the lender. |
| Term of the Guarantee | May extend up to seven years. The loans are typically fully-amortized, but up to a 25-year amortization is allowed for owner-occupied real estate. |
| Interest Rates and Fees | Negotiated between the borrower and the lender. SFV – FDC charges a guarantee fee of 2% of the amount guaranteed, plus a documentation fee of $250 upon closing. |
| Collateral | Required, if available, but each transaction is tailored to meet the borrower’s financial situation. |
| Lender Requirements | NONE – Lenders use their own packaging procedures and documents in processing and closing loans. |
The California Loan Guarantee Program benefits both lenders and borrowers. The program allows a business to not only obtain a loan it could not otherwise obtain, but to establish a favorable credit history with a lender. With that, the business may obtain further loans on its own, without the assistance of the program. Lenders will benefit from the ability to establish new lending relationships which can be fostered into long-term banking clients.
For more information regarding the program, please contact SFV-FDC at
(818) 205-1770.
State Guarantee Application Process
For Bank Lenders
The application process has been streamlined to facilitate a convenient, easy-to-use procedure for bank lenders.
For Small Business Owners
Small business owners may apply for a loan guarantee to facilitate a credit facility with a bank.