The Alliance SBDC has received a $60,000 grant from the State of CA, Governor’s Office of Business (GoBiz) to expand its ability to assist local entrepreneurs locate and secure funding for their business. The purpose of this new loan support program is to help local entrepreneurs acquire the capital they need to start, develop and grow their businesses. Alliance SBDC Director Kurt Clark says, “With a stronger economy returning to the Central Valley we are seeing significant numbers of small business owners seeking new funding to grow and expand their businesses. Many do not know the best way to approach a funder or prepare a loan application package.”
One of the most valuable services the SBDC offers is to help the business owner get ready for the initial conversation with the funder. A business owner who can talk about their funding needs on “bankers terms” showing the lender why they need the money and how they will pay it back is much more likely to be invited by the bank to apply for funding. Another key benefit of SBDC advice is helping determine which sources of funding are not in the business owners best interest and which are. “Some sources of small business funding can be very expensive, almost predatory at times says Clark, “I’ve seen clients who thought they were getting into a good short-term loan only to discover later on that they were paying 20-30% APR interest.” The SBDC wants to help local business owners find as many low-cost funding options as possible so they can select the cheapest source of funding that they can qualify for.
The Alliance SBDC has developed relationships with numerous local banks, regional non-bank lenders, alternative funders, city/county loan programs, local Angel investors, and a local Venture Capital firm. These funders are looking for strong startups, expanding businesses and high-potential growth companies with which to make loans or investments. Although it is still difficult for many hopeful borrows to qualify for loans, there has been an expansion of funding sources over the past 4-5 years giving business owners new places to apply.
The SBDC has contracted with two retired bankers who specialized in small business lending and loan underwriting. These loan experts will assist SBDC clients understand their ability to borrow capital, locate appropriate funding sources, complete loan applications, and prepare supporting loan documentation. Clark adds, “Potential borrows can receive help from the SBDC at no-cost to navigate the many funding options and greatly increase their chances to secure the capital they need.” After funding the SBDC can help educate and advise the business owner on how to best use the funds to maximize their future success.