About last night: How to find a loan for your business

This past Monday, I had the pleasure of speaking to a dynamic group of students at the John F. Kennedy University. The students were a part of the Institute of the Entrepreneurial Leadership (IEL) led by adjunct professor, Mark Westwind. 

The topic was small business lending and IEL invited four professionals to cover various lending options. A representative from the Heritage Bank of Commerce covered traditional SBA loan options, Corinne Gentile from Working Solutions discussed microlending, Brian McKeown discussed Kiva, and I shared information about crowdfunding platforms.

(L-R): Myself, Brian McKeown of Kiva, Becky from Heritage of Commerce, and Corinne Gentile of Working Solutions.

(L-R): Myself, Brian McKeown of Kiva, Becky from Heritage of Commerce, and Corinne Gentile of Working Solutions.

When I started my business a few years ago I was awarded a $5,000 loan through a microlender in the Bay Area. It was the best experience because I learned how to create a thorough business plan and present to a team of investors. 

If you're looking for funding for your business, there are a lot of options for you; even if you have poor credit or do not qualify for a traditional loan for whatever reason. Below is some information about what you need to apply, or effectively utilize, each option.

SBA Loans:

  1. Most common SBA (Small Business Administration) is the basic 7a loan
  2. Minimum loan amount is $50,000. Interest rate varies. It is usually around 5%
  3. Provide three years worth of business or personal tax returns
  4. Provide business financial statements (including Profit and Loss statements, cash flow and balance sheet). I recommend using Xero to easily generate these reports.
  5. Business license
  6. A complete business plan
  7. Click here to check if your business is eligible and more information

Working Solutions (microlender):

  1. Minimum loan amount is $5,000 and the maximum is $50,000
  2. Interest rate falls between 8-10%
  3. Your business must be local to the Bay Area
  4. You will need to provide business financial statements or projections
  5. A complete business plan and business license
  6. The qualifications are less stringent than SBA loans
  7. Click here for more information

Kiva Zip

  1. Peer to peer lending
  2. Zero percent interest
  3. Must provide a viable business plan
  4. You must invite people from your network to loan you funds in order to vouch for you and get the process started
  5. You have 45 days to raise your funding
  6. Click here for more information

Crowdfunding

  1. Peer to peer lending
  2. Give yourself at least 60-90 days to plan before launching
  3. Treat your crowdfunding campaign like a marketing campaign. It's as much about increasing brand awareness as it is about fundraising.
  4. Some business-related platforms you can check out: Moola-Hoop; Indiegogo, Kickstarter
  5. For more information, check out my previous post and YouTube video on how to have a successful crowdfunding campaign

Now I want to hear from you! Have you raised funds for your business? How did you go about doing it and what advice do you have for others?  Let me know in the comments below.

And if you'd like more business tips that I only share with my newsletter community, click here to sign up for my free newsletter delivered every Monday morning

Cheers,

Danetha

Danetha Doe (@danethadoe) is a business strategist and passionate about helping entrepreneurs succeed. Click here to view her consulting portfolio and here to learn more about her coaching for small business owners.