A Good Source to Finance Small Businesses
After a couple of years of steady growth, there’s just not enough space at your current location to keep up with demand. To make matters worse, you’ve had to turn down some great opportunities because you just can’t make and store enough product. You need to move to larger facilities and add more production equipment. A quick call to the only person you know at your bank deepens your depression when you’re told you don’t have enough assets, or been in business long enough, or don’t have enough cash flow to qualify for a business loan.
This is the frustration that often stymies small businesses from becoming medium businesses – they just aren’t bankable.
Enter Access Ventures, a local impact investment firm and the folks responsible for the great success of KIVA Louisville.
What’s an impact investment firm? It’s a firm that provides capital and resources to promising entrepreneurs that can have a positive impact on people and the community.
In late 2014, Access Ventures launched their Growth Loan program to help solve the lack of capital sources for un-bankable but promising businesses. Since then, Access Ventures has approved nearly $350,000 in non-collateralized Growth Loans to an array of small business owners throughout the Louisville and Southern Indiana region. Currently, loan proposals are vetted and approved by a volunteer loan committee made up of small business owners, attorneys, bankers, microfinance experts, and community representatives.
Borrowers can apply for up to $35,000 in growth capital that can be used to finance things such as equipment, legal or marketing expenses. Interest rates can vary depending on the deal but are usually at or below market and can have up to a 60-month payback period. There is no financial collateral requirement either. Your collateral is your local reputation.
Access Ventures looks for positive impact for the borrower, the business and the community, not the financial return earned on the loan. That’s why as part of the application process you’ll need to make a case for why it’s beneficial to receive the loan. Moreover, a personalized review process builds relationships with people that want your business to succeed. Providing helpful insights rather than focusing solely on a critical evaluation is an additional value add with this unique process. And, while traditional credit scores will always play an important role in the decision-making process, borrower evaluation looks at the merits of a business, it’s owner and its future potential not past performance.
Ready to get started?
You can find the initial application at www.growthloan.org.
Once your deal is vetted as having impact, you’ll need a professionally prepared business plan/loan proposal to submit to the loan committee. You are also required to make a 5-minute pitch to the loan committee.
It sounds like a daunting process, and it is to a certain extent, but the SBDC is here to help. We will help you prepare your loan proposal especially the crucial financial projections. We’ll also work with you on your pitch deck and even help you practice. Small businesses have limited free time and using the free services at the SBDC will save lots. While meeting with an SBDC consultant to create your loan package you'll benefit from additional insights and industry-wide data along the way. You'll also learn about other local options for accessing additional capital.
Since the loan program’s inception, the Louisville SBDC has steered many clients toward David Taliaferro and the Access Ventures team for capital. The SBDC has been there for many business owners after receiving loans to advise them as they grow.
If you’re a small business in need of capital and think an Access Ventures Growth Loan may be a fit, we’d love to hear from you! Click here to complete a brief questionnaire. Along with our new partner, Access Ventures, we will work to determine if a Growth Loan is right for your situation and help you fund that next opportunity.
Still want more info? Contact me and I’ll be ready to help