If you've got the entrepreneurial drive and have been thinking of starting your own business or if you've got a business already and are looking to expand, odds are you're looking for capital to help you realize your business goals.
The problem is many commercial banks these days are reluctant lend, and when they do they aren't interested in loaning the smaller amounts that small business owners are looking to borrow.
In a recent Reuters article on small business lending, entrepreneur Eric McCarthy outlined the trouble he had trying to secure a loan to build his ice cream business.
"I tried all of the big banks, literally all of them, and was shocked and surprised that I got turned down," McCarthy told Reuters. "The big banks didn't want to lend a little money; they wanted to lend a lot of money."
So what is a small business owner who needs money to do? Try Norristown's Micro-Loan Program. Partnered with Norristown's Small Business Assistance Center (SBAC), the two programs are poised make a powerful team in helping small businesses grow in Norristown.
"We're really trying to give people a package deal if they want to come into town and open a business," said Gabriela Prete, Norristown's business development coordinator.
The Micro-Loan Program offers loan amounts ranging from $2,500 to $50,000 with low annual percentage rates. Depending on the amount requested, loan approvals can come anywhere between 14 and 45 days. The higher the loan amount, the more time it may take for approval. The loans are managed by the Enterprise Center Capital Corporation, a nonprofit micro-lending agency with funds from federal, state and private grants.
"Two things happen with the application process, one, when they submit it, the Norristown Small Business Assistance Center will review it mainly for completeness and to qualify the person for the particular loan," said Ronald Story, business consultant for the SBAC. "Then we submit that on to Mike [Bing] at the Enterprise Center."
Story works closely with the applicants to make sure they have the necessary documents to submit a completed application.
"We look at both existing businesses as well as start ups," said Story. "They would have to come in with a completed application, a business plan or a financial plan."
Applicants missing a piece of the puzzle can count on Story to help them through the process. It's all part of the SBAC's free services.
"Surprisingly, a lot of existing businesses don't even have a business plan," Story pointed out. "If they don't have those pieces, I'll work with that entity to help develop it."
In addition to a business plan, applicants also need the last three years worth of income tax records (both business or personal), a personal financial statement, a credit report and monthly cash flow projections for next 6 months (if applicable). Story will help compile all of these documents, and assures those with credit problems that they won't be shut out of the process.
"The commercial banks right now are looking at 800 credit scores or higher," said Story. "With the majority of the people we work with, that would knock them out of the running. We don't weigh credit. We look at the viability of the business idea or the sustainability of the current business if they're already existing."
Once your financials are sorted out, Prete can help you set up your business in town.
"Ron helps with business plans and getting your financials straight," said Prete. "Where I come in is when someone's at the point of looking for available space."
Both Prete and Story stress how valuable these programs are, not just to new businesses, but to existing ones as well.
"We want more businesses, but we also want to encourage businesses that we do have to grow," said Prete. "These micro-loans can take someone to the next level."
A free Micro-loan orientation seminar is scheduled for Thursday, Sept. 13, from 6 to 8 p.m. at Norristown Municipal Hall, 235 East Airy Street. Walk-ins are welcome, but Prete suggests you RSVP by calling 610-277-4455 or emailing firstname.lastname@example.org.
You can download a micro-loan application and Norristown's guide to starting a new business in our PDF section.