business lending at self help credit union

Presented by Jennifer Sherwin

Business Lending

at Self-Help

Who is Self-Help?

Community Development Financial Institution (CDFI).

Mission: provide ownership and economic opportunity for all, especially people of color, women, rural residents, and low-wealth families and communities.

What will be covered

Overview of our loan products

Loan Examples

Who we fund

For Profit Businesses Non Profit Businesses Religious Institutions Supportive Housing And more

What purposes we fund

Working capital New and used vehicles Equipment purchase Business space up-fit Real Estate Purchase

What loan programs does Self-Help offer?

Simple Business Loans for business vehicles and loans up to $15,000

Micro Business Loans $15K-$35K

Business loans > $35,000

Simple loans for vehicles and operational loans ≤ $15,000

Loans can be secured with cash, vehicle, equipment.

Unsecured loans available up to $7,500 for qualified borrowers.

Criteria for simple business loans

Will be looking that your current source of income can cover this loan payment.

Businesses with 2-year track record.

Start-ups w/secondary source of income.

Must have good personal debt to income.

Credit will determine the interest rate.

Micro business loans up to $35K.

Looks at current source of income as means to pay for this loan.

Must have relatively good credit Must be well secured with real estate or cash If a start-up - need another source of income Existing business - need 2 years tax returns w/profit in

last year Fixed, 9.75% interest rate – over 3-5 year term

Criteria for loans > $35K

The five “Cs”– Character/Management experience

– Capital/Owner’s investment

– Cash Flow

– Credit History

– Collateral

Other: Personal Debt to Income and Secondary Source of Income

SBA loans

Must be US citizen

Can only be used on For-Profit Businesses

SBA 7A

Must be lender’s basic underwriting criteria

SBA provides lender a 75%-85% guarantee

Interest and term – varies based on loan purpose

In addition to lender fees, borrower pays 2%-3% fee on the SBA’s guaranteed portion.

SBA 504 loans

Large capital purchases only, usually real estate. Requires partnership with another lender Less down payment than traditional loans

– 10% if existing business – 15%-20% if new business

Structure: bank will do 50%; borrower 10%-20% and SBA 504 30%-40%

Rates: fixed interest rate over 10-20 year term

$7K working capital for a barber

Borrower’s spouse will co-sign and has secondary source of income.

Borrowers have minimal personal and business debt.

Borrowers have decent credit. Borrowers qualify for unsecured simple

business loan.

$20K for a small delivery van for existing caterer

Owner has 2 yrs. of tax returns showing a profit

Owner has good credit and low debt/income

Vehicle qualifies for our Simple Loan product

Interest and term will depend on age of vehicle and personal credit.

$75K for equipment for existing computer consulting business

Borrower has fairly good credit. Business has been profitable and cash flow

shows can handle this additional debt. Has $30K of real estate collateral to pledge. Lender uses SBA 7a to guarantee loan. Rate: Prime + 2 variable rate over 5 years.

$800K to purchase and renovate space for an existing restaurant.

Borrower meets lender and SBA 504 underwriting criteria.

Borrower puts down $80K (10%).

Other lender does loan for $400K (50%)

SBA does loan for $320K (40%)

Contact Information

Center for Community Self-Help