Moderator Emeritus
Posts: 7,970
Registered: ‎12-19-2007
Re: Business Credit 101

Xavier wrote:
I am a Business Development Specialist and Technical Assistant Provider certified by the SBA. There are several funding options available for small business owners. The SBA has a loan program that not too many people are aware of. This program is called the CommunityExpress SBA-guaranteed loan program. No collateral, business plan or financals are required. The loan is based on a 7-year payment plan and there are no penalties for prepayment. This program was introduced in 2001 as a Pilot loan program for small business owners.
I am sure some may think this is too good to be true, however, this loan program was designed for business owners who do not meet the criteria of a traditional bank. The approval process is based on your Experian credit, business type, and your related industry experience.
If you have been in business for less than 2 years you could apply for up to $25,000 -- even if you are a brand new start-up. If you've been in business longer than 2 years you could apply for up to $50,000. There are several components to the CommunityExpress program. This particular program that I've described above is referred to as the "SOHO Loan" (Small Office Home Office) program.
There are pros and cons to applying for unsecured business loans. The interest rates for this program is as follows: $25,000 and lower = prime, plus 4.75%; over $25,000 = prime, plus 3.75%. In addition, there is a $475.00 application fee paid directly to the bank (Innovative Bank). The bank will not cash your application fee check unless the loan has been approved. In addition, the bank will not cash your check until they literally fund your loan. There are only 5-7 banks within the US that is licensed to participate in this program.
Since the inception of the CommunityExpress loan program, business owners are required to work directly (e-mail, phone, in person) with a certified Technical Assistant provider. The Technical Assistant provider CAN NOT charge the small business owner for assisting in the preparation of the loan application.
In 2007, my company (which consist of 2 certified Technical Assistant Providers) assisted small business owners obtain 1.5 million dollars in SOHO loans. The majority of these loans were $25,000 or less.
Check for more information on this program or
Good luck.

Xavier, that's really good information. I never did much with the SBA. I have done a hand-full of 7a's, as well as low docs. We had a gentleman in our bank that specialized in SBAs (did some Express loans too).

You guys have done a lot of transactions. Good for you...empower the community.

What kind of EX scores do you look for in approving the loan? Besides score, what baddies does SBA scrutinize?

Do what is true in spite of the consequences--your future is only as true as you are.