“The reason why businesses don’t know about most of these alternative programs is because they’re not heavily marketed,” explained Bonnie Moore, director of business services for the CREDC and the Southwest Washington Workforce Development Council.
According to Moore, the three main alternative financing tools to be discussed at the workshops include:
1. Government-backed financing: small business loan programs funded by the Small Business Administration (SBA). Examples include the 504 Program; the 7(a); and micro loans of $5,000, $10,000, or $15,000 that are designed to help with significant working capital shortages or, for instance, to purchase equipment or train employees.
2. International trade financing, which includes import/export loans.
3. Economic development and financing tools such as tax-exempt financing and the new market tax credit.
Jim Bright, vice president and lending specialist at Northwest Business Development Association, will discuss the SBA 504 Program at the CREDC’s financing workshop on Friday, April 13. Bright said he has noticed an increasing number of lenders are using SBA programs much more frequently than they used to. He attributes this to increasingly aggressive monitoring of banks’ credit performance.
“Banks have learned a hard lesson over the last several years about making ‘weaker credits’ or, more accurately, not staying on top of the credits that are in their portfolio,” he said.
Like Bright, Lashell Carrick, senior vice president and loan officer at Evergreen Business Capital, will focus on the SBA 504 Program during her portion of the April workshop. Carrick explained that most for-profit small businesses are eligible for a 504.
“Their tangible net worth needs to be less than $15 million and their profit after taxes needs to be less than $5 million,” she added. Slightly higher loan amounts can be granted to projects that incorporate energy-saving technologies, according to Carrick.
She also mentioned that a refinance piece of the 504 Program is set to expire in September of this year. The refinance program can help borrowers lower their interest rates. Evergreen has seen a large number of applicants for the refinance program, she said, especially in anticipation of the expiration date.
“We’re hoping the SBA will extend it, but we don’t know yet,” said Carrick. “We’re keeping our fingers crossed.”
The CREDC’s April 13 workshop focusing largely on loan programs funded by the SBA will be held from noon to 1:30 p.m., at 805 Broadway, Suite 412, in Vancouver.
For more information about the small business financing workshops, contact Bonnie Moore at 360.567.1055 or bmoore@credc.org .
