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One often overlooked source of capital for small businesses is the SBA Microloan Program. This program provides small, short-term loans to small businesses through designated intermediary lenders who make the lending decisions and administer the loans as well as provide management and technical assistance to the borrowers. The maximum loan amount is $35,000; the average loan is about $13,000. Minimums depend on the lender but can be as low as $500.
The proceeds from these loans are intended to help a business get started or grow. Proceeds cannot be used to pay or refinance existing debts or to purchase real estate. Microloans may be used for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery and/or equipment.
Intermediary lenders often restrict their lending to a specific geographic area. Lenders serving counties in the COSE region are:
Cuyahoga County
Working for Empowerment through Community Organizing (WECO)
3209 Chester Ave.
Cleveland, OH 44114
Phone: 216-458-0250
http://www.wecofund.com/me_center.asp
Lake County
Community Improvement of Lake County
391 W. Washington Street
Painesville, OH 44077
Phone: 440-357-2290
http://www.lcedc.org/index.php/microloans
Portage County
Kent Regional Business Alliance
College of Business #300-A, KSU
Kent, OH 44242
Phone: 330-672-1275
http://www.krba.biz/loans/index.php
In addition, there are some national lenders that offer SBA programs. Superior Financial Group http://www.superiorfg.com/Main2 is one. You may have heard that Superior has partnered with Sam’s Club to offer their loan programs at a discount to its members. Information about that program can be found at http://www.samsclub.com/sams/pagedetails/content.jsp?pageName=sbaLoanProgram. My personal opinion is that local lenders such as those listed about are better positioned to offer effective support to borrowers (an integral part of the SBA Microloan program) and will be able to understand the dynamics of the specific local business environment. However, their funds are limited so they cannot lend to every qualified business.
John Doucette
Liquid Capital of Northeast Ohio
(440) 734-3321
john@lcneo.com
www.lcneo.com