ESSENTIAL ELEMENTS OF A SUCCESSFUL BUSINESS
Here are three sections designed to assist you…each in a special way:
#1 – is a means to measure yourself to see if you are prepared to start a small business. The Small Business Administration has a boundless amount of resources to help small business. Clicking on the link below will take you to an SBA – designed assessment tool that will help you better understand your readiness for starting a small business.
Click here : AM I READY?
#2 – explores obtaining UNSECURED LOANS financing in the Sandhills area.
#3 – is a complete library of our special business columns that appear monthly in The Pilot.
Click here: ASK SCORE
SMALL BUSINESS FINANCING IN THE SANDHILLS AREA
Unsecured Loans
An unsecured loan is by definition one that requires no collateral. When starting a business, availability of resources can be the greatest challenge. Since start-ups have a proven risk considerably higher than businesses in operation for 2 years or more, obtaining a start-up loan can be very difficult without collateral.
The SBA has established the Community Express Loan Program to help small businesses in low and moderate income areas, minorities, women and veterans. The program has four loan providers each of whom require that a loan application be submitted through a Technical Assistance Provider (TAP). A Business Plan is required with each application. The TAP will be associated with the loan receiver for the life of the loan and is there to provide technical and management assistance designed to increase the loan applicant’s chances of success.
The three programs are described below:
| Business Loan Express | Innovative Bank | Superior Financial Group | |
| Loan Amounts | Unsecured $5,000 – $50,000 In even $1,000 increments |
Unsecured $25,000, $35,000 $50,000 For existing business (at least 2 years) |
Unsecured $5,000, $7,500, $10,000, $12,500, $20,000, $25,000 |
| Term | 10 years | 7 years | 10 years |
| Interest Rates | Loans $5K – $25,000 Prime+4.75% Loans $25K -$50K Prime+3.75% |
Prime+3.25% $35k – $50k |
Prime+4.50% |
| Fees | $425 Processing fee | $525 Processing fee | $550 Processing fee (loans $15-$25,000) |
| Other | SBA Guaranty Fee (no fee $5,000) |
SBA Guaranty Fee (no fee $5,000) | SBA Guaranty Fee (no fee $5,000) |
- Each of these programs requires submittal of a Business Plan.
- The loan application for each program will be submitted to the lender via the TAP. The TAP is:
Rayshonia “Ray” Manuel
Women’s Business Center
230 Hay Street
Fayetteville, NC 28301
Phone 910-323-3377
rmanuel@wcof.org
Micro-Loan Program
The Women’s Business Center of Fayetteville (Women’s Business Center) has established a Micro-Loan Program. Details:
- Loan Amounts: $500 – $8,000
- Terms and Conditions: Interest 10% fixed, 1 – 3 years
- Technical Assistance: pre and post loan closing management and technical assistance
- Completed Business Plan required (meeting w/WBC Consultants)
- Reasonable credit history required
Secured Loans
All banks in the Sandhills area can be approached for consideration of a secured loan. However, even with collateral a start-up loan can be very difficult to achieve with a bank. Although SBA backing is theoretically achievable, many banks will not be amenable to pursuing that option and would rather avoid the paperwork associated with the risk of a start-up. The phrase one hears is “Your venture does not meet our risk profile”.
There is a fourth provider within the Community Express Loan Program that will consider higher risk ventures than the regular banking community. This provider handles the loans of higher value than the three noted above but it requires collateralization of virtually all its loans.
| Self-Help Credit Union* | |
| Loan Amount | $1,000 – $250,000 |
| Term | 1 – 14 years |
| Interest rate | Loans up to $25,000 = Prime+2 – 4.75% Loans $25,000 – $50,000 = Prime+ 2 – 3.75% Loans $50,000 – $250K = Prime+ 2 – 2.75% |
| Fees | $1,000 or 1% of loan amount, whichever is less. Minimum processing fee of $250 |
| Other | SBA Guaranty Fee |
*The Self-Help Credit Union is headquartered in Durham. However, the nearest location is:
Self-Help Credit Union
100 Hay Street, Suit 300
Fayetteville, NC 28301
Regional Director – Allen B. Cofiori
Tel: 910-354-1015 / 800-744-7966
email: allen.cofiori@self-help.org
- Contact this office to get all the details of loan application, relevant TAP, etc.
- You may also go online to download a loan application by clicking here and checking off which loan application is right for you:
Self-Help Loan Application
Veterans
The SBA has just opened a new initiative – Patriot Express – for veterans and members of the military community wanting to establish or expand small businesses. Eligible personnel:
- Veterans
- Service-disabled veterans
- Active duty service members eligible for the military’s Transition Assistance program
- Reservisits and National Guard members
- Current spouses of any of the above
- The widowed spouse of a service member or veteran who died during service or of a service-connected disability
The new Patriot Express loan is offered by SBA’s network of participating lenders (locally BB&T is on board). Loans under this initiative are those normally guaranteed by the SBA. They feature SBA’s lowest interest rates for business loans, generally 2.25% to 4.75% over prime depending on the size and maturity of the loan. The Patriot Express loan can be used for most business purposes including start-up, expansion, equipment purchases, working capital, inventory or business-occupied real-estate purposes.