SBA Community Express Loan

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

This post is a bit different from most of the others so far. I wanted to pass along some information that I hope can be useful to you, my readers, no matter what business you're pursuing.

Our thrust here has been to establish credit for your business entity. This information represents an oppportunity to actually obtain credit, albeit personally guaranteed by you, the business owner.

My Small Business Development Center (SBDC) rep. at at my local community college recently made me aware of the Community Express loan program from the Small Business Administration (SBA).

Here's the thumb-nail sketch: the Community Express loan program provides $5,000 to $25,000 in unsecured funds at prime+4% amortized over 10 years. The monthly payment is roughly $64 per $5000 borrowed at the current prime rate.

The loan is guaranteed personally by you, and is based on your credit and character, not on your income (startup businesses take note!).

There are some fees deducted from the loan proceeds before you get the money, but that's actually a good thing. By the time you get the money, the fees are already covered and the rest is for your business's use.

Once you are granted a loan, and make payments on-time for six months, you may be able to apply for more funds. This may help you capitalize a startup using only your own good credit rating without putting your personal assets up as collateral or at risk, and even if you have no liquid cash assets.

You should already have a business entity set up and have an EIN, but this might not be required. Check with your local SBDC rep.

Contact your local SBDC rep. for full details.

When you go on-line to apply, make sure you read the directions for filling out the on-line application. Look for the directions link - it's not entirely obvious. This will help you avoid mistakes as some of the questions do not ask exactly what they mean.

Now - don't let the personal guarantee aspect put you off. Even if you can only get the minimum $5000, the monthly payments on that for the first year only come to $768. So, set aside that much - roughly 20% - from the proceeds of the loan to make the first year's monthly payments, and use the rest to help build your business and its profit stream. Do it right, and you'll soon have money coming in to keep up the payments and continue to build your business's profit stream.

Hope this helps!

We'll talk again soon!

Take care - be well!

Much Success!