Borrowing for Micro Enterprises and Small Businesses
For small businesses and micro enterprises, the Community Loan Fund provides various types of loans and lines-of-credit. Loan applications may be submitted at any time – however, it is highly recommended that you discuss the application and the application process with a Loan Officer prior to submission. Each loan application is evaluated on a case-by-case basis for its financial viability and positive social impact. Program funds and terms are subject to change without notice.
Financing will be made available to small businesses that are locally owned by:
- persons of low-income (defined as below 80% of the area HUD median, adjusted for family size); or
- minorities (MBEs); or
- women (WBEs)
Credit will not be made available to any business that disrupts the community or environment, operates illegally, exploits resources or does not meet certain social screens.
- Real property – acquisition or improvement
- Equipment or inventory
- Cash flow or working capital
- Energy-efficiency and green technology initiatives/improvements
- For start-up businesses, the maximum loan amount is $25,000
- For existing or expanding businesses (with at least 12 months of consistent sales), the maximum loan amount is $50,000
- Participation loans with other lenders are considered on a case-by-case basis
- Other special products and programs are periodically available
- Repayment terms vary based on use of funds, cash flow and social impact
- Generally, (non-mortgage) term loans will not exceed 60 months
- Generally, bridge loans and lines-of-credit will not exceed 12 months
- Fees vary, depending on size of loan, collateral and other factors
Interest rates will be determined from time-to-time by the Community Loan Fund, at its sole discretion. The current rate is 8% fixed, subject to change without notice.
All loans shall be secured by one, or more, of the following:
- Business assets- equipment, inventory and/or receivables
- Personal guarantee(s)
- Contract assignment
- Application fee: $25 due at time of application (includes cost of credit report)
- Origination fee: $200, due at time of closing and may be paid from loan proceeds
- Legal fee: varies according to size and purpose of loan and may be paid from loan proceeds
- Other fees: In addition to the above, borrower is responsible for all closing costs assiciated with a loan, including, but not limited to, filing, recording and title fees.
- No Pre-Payment Penalty
- Financial reports (monthly, quarterly or annually, as required by the Community Loan Fund)
- Annual tax returns
- Report on job creation and impact on community (as requested)
- Other information as requested by the Community Loan Fund
- Prospective borrower identifies need and contacts the Community Loan Fund.
- Staff informs prospective borrower about loan products and other services.
- If appropriate, prospective borrower completes loan application, including development of business plan, if applicable.
- Application submitted to the Community Loan Fund. After initial review, additional information may be requested.
- Staff orders a credit report and begins underwriting the loan. Additional information may be requested.
- When application is complete, Loan Officer presents to a Loan Committee and, if necessary, to the Board of Directors.
- If approved, a commitment letter is issued. Borrower signs indicating acceptance of proposed loan terms and conditions.
- Community Loan Fund coordinates the loan closing, which may be at our office or our attorney’s office.
- After loan is made, staff services and monitors the loan.
- The Community Loan Fund may offer (or require) borrower to receive technical assistance. In addition, we may offer (or require) periodic visits to your business to review your business/financial performance and review upcoming business/financial challenges.