The SBDC can help you obtain a commercial loan from your bank.
Many small business owners work with our consultants before seeking a commercial loan. We provide templates, coaching, and interview prep to help them secure funding.
Wondering if you would be eligible for a commercial loan?
Whether it’s one of our loan programs or a traditional bank loan, your loan officer is going to consider five different factors before he or she makes a decision about whether to issue your business a commercial loan. These include:
Character +
Character, or, alternatively, “credit history,” is a crucial factor when deciding whether to issue your business a loan. A bank will first and foremost examine your credit reports to see whether you have a history of paying back your debts responsibly. If your credit score is below 650, you may have a very hard time obtaining a business loan. Many bankers will also consider other character-related attributes beyond a person’s credit score, so the reputation of you and your management team does matter.
Capacity +
The next factor a bank is going to consider is whether you have or are likely to have enough cash flow to allow you to make your loan payment comfortably. They will determine this by looking at 3 years worth of financial projections (especially in the case of a brand new business) as well as your past financial performance and growth trends. If a bank is not very confident in your business plan, or you don’t even have a business plan, you probably won’t get a business loan.
Capital +
Just like with home mortgages, a commercial lender will expect the business owner to “have some skin in the game” by injecting some of their own money into the deal. Traditionally, the percentage the bank is looking for 20% of the funding to come from the business owner(s), so if your business requires $100,000 for startup or expansion, the bank will expect you to put up $20,000 before it will lend the other $80,000. That said, there are some special loan programs that can reduce your required capital down to as low as 10%.
Collateral +
Because there is always a chance a business will struggle or fail, the bank is going to want to make sure that there is adequate collateral to help secure the loan. If you default, the bank will attempt to sell your real estate, equipment, and other assets to recoup its losses. If you have very little collateral to secure the loan, the bank may not be interested in issuing one to you.
Conditions +
Finally, a banker is going to evaluate the current economic conditions to determine whether there are any downturns that ought to affect their decision. These may be local economic trends or they could be industry-specific trends. If the trends aren’t working in your favor, the deal may turn south.
The SBDC also manages a variety of loan programs designed specifically for local companies.
CITY OF SPRINGFIELD REVOLVING LOAN PROGRAM +
New and existing for profit businesses located in the City of Springfield are eligible.
The SBDC partners with your lender with the goal of providing up to 90% financing.
Job creation and or retention are required.
CITY OF SPRINGFIELD MICRO-LOAN PROGRAM +
Direct loans of up to $10,000 to for profit micro enterprises (less than five employees) located in the City of Springfield.
Typically given to new and start-up businesses with no job creation or retention requirement.
CLARK COUNTY REVOLVING LOAN PROGRAM +
Direct loans to for-profit manufacturers, retailers or service businesses located in Clark County.
New and existing for profit businesses are eligible. SBDC partners with your lender to help provide up to 90% project financing.
Job creation and retention apply.
CHILDCARE MICRO-ENTERPRISE LOAN PROGRAM +
Loans to provide assistance to established and new child day care providers.
Loans are available to those businesses located in Champaign, Clark, Greene and other surrounding counties and can include permanent operating capital requests.
Program Support
Program support opportunities and sponsorship information will be displayed here.
Thank you to our
Business Finance Program Sponsors
City of Springfield
Park National Bank
Inquire About Our Loans
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