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Finding Business Finance to Start or Expand Your Business

March 27, 2012 by Frank Goley, Business Consultant

Investment Overview Article

The business lending market has certainly gotten more difficult post-recession. Lenders want to see ample collateral, a good Business Plan, solid management team, excellent financials, etc. This is why business plan consultants and writers are in more demand in this tough economy. Businesses are realizing that they need a solid plan to present to funders, whether a bank, investor or venture capitalist.

So how do you find business finance in this challenging finance climate? Well, there are a lot of ways, SBA being one, investors being another, grants if industry specific need- there are a ton of business finance alternatives that I have blogged about previously (click on: Business Finance). In this post, I will relate a funding source that I read about in Entrepreneur Magazine, which I think holds a lot of promise.

Starbucks and CreateJobsforUSA.org to the Rescue

Starbucks has hooked up with CreateJobsforUSA.org to support a unique business lending program. Every $5 donated at a Starbucks location will support $35 in small business lending. Starbucks is partnered up with the Opportunity Finance Network, which is hooked up with 180 Community Development Financial Institutions (CDFI). These CDFIs specialize in lending to disadvantaged and low income individuals and underserved communities in the US. This program launched in November 2011 with an initial donation of $5M from Starbucks. The leveraging is substantial: for every $3,000 donated, $21,000 is given out in loans.

Who Can Apply?

Anyone can apply for this financing which makes it viable for a lot of different types of businesses. Be sure to make a good impression by developing your business plan through SCORE, SBA, SBDC, or with a professional company that offers business plan services.

Preference Given to Businesses Who Create Jobs

One surefire way to secure this finance is to show in your Funding Business Plan that this loan will result in “x” jobs. If you can show you will be providing jobs in hard hit economic areas, then you will certainly garner attention.   

What Makes These Loans Different?

Well, have you been able to really talk to your banker about your business situation and needs lately? Does he come by your business and chat with you? Heck no…not in this big bank dominated bad economy…A CDFI will take the time to actually speak and counsel you- helping you every step of the way to have a successful business enterprise. Nice change of pace, huh?

Loan Program Details

Term: Five plus years.

Amount: Average is $200-$300K. Microloans of $5-$10K available. Some 7 figure loans given.

Interest Rate: 5%-7%. Short term micro’s will be higher.

Collateral: Required but you can cross collateralize a lot of different types of assets.

For More Information

Go to the Opportunity Finance Network. Get cracking on your business plan today!

Disclaimer: ABC Business Consulting is not offering any form of business finance, and this is for information purposes only. Any terms mentioned is for informational purposes and not intended or construed to be a loan offer.   

Reference: “Brewing Up U.S. Jobs” by Michelle Goodman, Entrepreneur Magazine, January 2012.

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