28 th Annual Rural Community and Economic Development Conference President Abraham Lincoln Hotel March 9, Rural Resources Roundup

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1 28 th Annual Rural Community and Economic Development Conference President Abraham Lincoln Hotel March 9, 2017 Rural Resources Roundup

2 Sources of financing for businesses in your community.

3 Where to Get Money to Start or Grow a Business Money that you have saved Money from an investor who gets a share/piece of your business Money given or loaned to you by your family or friends Money that you borrow personally usually through a home equity line of credit or a credit card Money that you borrow through a business loan Microloan lending program State or other local lending program Business loan from a bank or other lender including a loan supported by Small Business Administration (SBA)

4 SBA provides a loan guaranty for the lender s loan. Use of loan proceeds can be for business assets. Term loans are used to finance fixed assets and real estate. Lines of credit are used to finance working capital needs.

5 SBA 7(a) loans SBA 7(a) loans are the most flexible loans available for business use The maximum is $5 million with a term that depends on the use of proceeds SBA 504 loans Financing for equipment and real estate The maximum is $5.5 million with a 10 year fixed rate term for equipment and 20 year fixed rate term for real estate

6 Benefits of an SBA Guaranty Favorable loan terms for the business, including longer term matching useful life of asset financed No balloons No prepayment penalty for loans under 15 years Improved cash flow for businesses Competitive rates of interest During the life of the loan the lender has ability to modify loan terms to support loan repayment

7 Accessing Financing Business plan prepared Loan proposal prepared Approach lender of choice Lender may offer conventional loan If lender wants to mitigate risk and dollar exposure through SBA guaranty, lender works with SBA If approved by SBA, or submitted by a lender delegated by SBA to make unilateral loan approvals, lender closes loan Business communicates directly with lender throughout the life of the loan

8 Fee Waivers and Reductions No guaranty fee for loans up to $150,000 through September 30. For veterans and their spouses, the guaranty fee for loans $150,001 through $500,000 is reduced by half through September 30.

9 Loans under $350,000 Loans $350,000 and less are now credit scored Efficient process for lenders and faster process for businesses All SBA loan guaranty submissions are now done electronically.

10 Microloans Microloans are small loans with a maximum of $50,000, a term no longer than 6 years and an interest rate of about 8% to 13% Microloan lenders can be found on SBA s website See the bottom of the Microloan section of the SBA website for the pdf file Participating Intermediary Microlenders Report to find microloan lenders listed alphabetically by state

11 Microlenders in Illinois For start-ups and existing businesses. Proceeds can be used for working capital, inventory or supplies, furniture or fixtures, and machinery or equipment. Justine Petersen Accion Chicago Galen Gondolfi x 132 ggondolfi@justinepetersen.org Monica Sanchez (312) msanchez@accionchicago.org

12 SBA LINC

13 Ready to Go More SBA Info

14 Ready to Go Business Plan

15 SCORE SCORE is a nonprofit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship. SCORE has a network of 11,000+ volunteer mentors SBA s funding support allows services to be offered at no charge or very little cost Visit to find mentors, additional articles, webinars, and other helpful information

16 Small Business Development Centers SBDCs provide high quality one-on-one consulting, training and information resources to empower new and existing businesses. Funding support is provided by the SBA, to enable SBDCs to provide free, one-on-one, longterm professional business advice and low cost business training. Each SBDC offers relevant assistance in all aspects of small business management business planning, marketing assistance, financial management, loan packaging, export-import assistance, etc.

17 Find Local Resources Enter your zip code and you will see a map with various local resources Refer to Illinois Small Business Resource Guide for locations and contact information. Click on Illinois District Office Resource Guide

18 Valerie J. Ross, Branch Manager U.S. Small Business Administration 3330 Ginger Creek Drive, Suite B-East Springfield, IL / , 108