Financing Your Small Business

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Financing Your Small Business
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Financing Alternatives

• Personal savings
• Credit Cards
• Family and friends
• Local revolving loan funds
• Suppliers
• Leasing
• Strategic partnerships
• Banks, credit unions, and other lenders
• Guaranteed loans (SBA Community Express)

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SBA Community Express Loan

• Loans to be used only for business-related
  purposes(however, cannot be used to purchase a
  business)
• 10-year loans no collateral required no
  prepayment penalties
• Minimal paperwork and fast decisions
• Electronic funding directly into business
  checking
• Affordable monthly payments automatically debited
• Based in large part on personal credit history
• Financial, technical, and management assistance
  BEFORE and AFTER the loan (TAP Report)
• SBA guarantees 85 of the loan

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Free Credit Reports

• One free report per year from each of the three
  reporting agencies Equifax, Experion, and Trans
  Union.
• Toll free 1-877-322-8228Online www.annualcredi
  treport.com
• Mail Annual Credit Report Request
  Service P.O. Box 105281 Atlanta, GA
  30348-5281
• Identity theft is REAL --- Get your 3 FREE
  reports throughout the year (January, May,
  September)

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FICO SCORES

• Fair Isaac Corporation (FICO) scores are your
  credit rating used by most banks
• They range from 300-850, higher is better
• Most lenders base approval on them
• Higher scores mean lower interest rates
• The median FICO score in the U.S. is 723
• More info at www.myfico.com

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Whats in your FICO Score?
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SBA Community Express Lenders in Alabama

• Redstone Federal Credit Union (RFCU)
• Innovative Bank (SOHO)
• Superior Financial Group (SFG)
• Borrego Springs Bank (BSB)

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Redstone Federal Credit Union (RFCU)

• 5,000 to 50,000 in 1000 increments
• Interest rates of Prime 4.00 for loans 5,000
  - 25,000
• Interest rates of Prime 3.25 for loans 26,000
  - 50,000
• 325 processing fee and SBA guaranty fee of 2
• Fees deducted from the loan proceeds (discounted
  loan)
• Can be established as a Line of Credit.
• If the loan is paid on time for 6 months, the
  borrower can apply for additional funds

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Innovative Bank (SOHO)

• 5,000 to 50,000 in 5,000 increments
• Can be approved for a lesser amount
• Interest rate is Prime 4.75for loans 5,000 -
  25,000
• Interest rate is Prime 3.25for loans 35,000
  and 50,000
• Packaging fee of 475 and SBA loan guarantee fee
  of 2
• Fees deducted from loan proceeds
• Fees not charged on 5,000 loan
• If the loan is paid on time for 12 months, the
  borrower can apply for additional funds
• Military/Veterans qualify for 90-day deferment of
  1st payment

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Superior Financial Group (SFG)

• 5,000 to 12,500 in 2,500 increments
• 15,000 to 25,000 in 5,000 increments with
  stricter credit requirements
• Interest rate is Prime 4.5
• Packaging fee of 450 for loans up to 12,500
• Packaging fee of 550 for 15,000- 25,000 loans
• Fees deducted from loan proceeds
• Fees not charged on 5,000 loans

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Borrego Springs Bank(BSB)

• 5,000 to 50,000 in 1,000 increments
• Interest rate of Prime 4.75 for loans 5,000
  to 25,000
• Interest rate of Prime 3.75 for loans 26,000
  to 50,000
• Fees deducted from the loan proceeds

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Eligibility

• Borrowers must be of good character - cannot
  be a convicted felon - has not defaulted on
  government-backed student loans- has not
  defaulted on child support payments- has no IRS
  judgments or tax liens
• Liquid assets cannot exceed 100,000 (does not
  include 401k or IRA accounts)
• Franchises must be on the SBA-approved Franchise
  Registry (www.franchiseregistry.com/registry).

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Ineligible Businesses

• Non-profit businesses
• Investment real estate
• Agricultural and farm businesses
• Fishing and shore operations, and mines
• Medical facilities such as nursing homes
• Applicants doing business in a foreign country
• Businesses of a religious nature
• Businesses with products or services of a sexual
  nature

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Estimated Monthly Payments (10-Year Loans)
Based on Prime _at_ 6.00 4.5 (avg) Based on
Prime _at_ 6.00 3.7 (avg)
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Summary
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Lender Contact Info

• RFCU www.redfcu.org or call 256-722-3636
• SOHO www.innovativebank.com or call
  888-960-0700
• SFC www.superiorfg.com or call 877-675-0500
• BSB - www.borregospringsbank.com or call
  866-644-0042

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Other SBA Loan Programs

• 7(a) Loan Guaranty - Most used SBA type of
  loan- Up to 2 million for working capital,
  fixed assets, repayment of existing debt, buy
  a business, etc.
• SBA Express- Up to 350,000 for working
  capital, fixed assets, repayment of existing
  debt, buy a business, etc.
• Patriot Express- For Veterans and active
  military personnel- Up to 500,000 for working
  capital, fixed assets, repayment of existing
  debt, buy a business, etc.

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Other SBA Loan Programs

• For more information,
• visit the SBA website at www.sba.gov
• and click on Financial Assistance
• under Services

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