Micro Loans: What Are They and How Do You Get One?
Let me introduce myself first. I am Craig Downs, President of IowaMicroLoan. I have been a part of this organization since 2008 and prior to that I was involved in the banking business for 27+ years. Now, to more important and useful information.
Micro loans: What are they? How do you get one? You know, the who, what, where, when section.
For our purposes micro loans are simply loans of between $5000 and $50,000 to either existing businesses or start-ups that have 5 of fewer employees. We can finance not only start-ups, but expansions and refinances of existing debt. Approximately 90% of start-ups do so with some form of credit card debt. We can even refinance that and mitigate some of those HIGH interest rates. We do require our applicants to have a denial from a traditional lending source as we are not in the marketplace to do “bank qualified” deals.
Our application process is fairly straightforward and contained in our website, iowamicroloan.org. Our application is located therein at the tab “How We Can Help”. Also, as part of the app, there is a list of the other information we will need. Once you have your packet of information together just mail it in to our office. Once we have a complete application package we get an answer back to you within 2 weeks, unless further questions arise in underwriting.
What can we finance you ask? We can do inventory, equipment, working capital, most any business need. What we cannot do is purchase any real estate or provide a short term line of credit.
Currently, our 6 year term, fixed rate loans carry a rate of 8.125%. We typically see repayments in monthly installments, but do work with seasonal cash flows.
One part of our program of which we are most proud is the technical assistance(TA) we provide to our loan clients. We meet face to face at least quarterly with our clients to review and discuss their business. We make sure they can use a financial reporting system like Quick Books to serve their needs and help manage the business amongst a myriad of other things. It may be help with marketing, service area definition, pricing, form of ownership, etc., etc. We define TA as anything that can help your business succeed.
We have served in excess of 80 clients located within 28 counties of Iowa. We have loaned out nearly $2 million total. Our service area is anywhere in the Great State of Iowa. If you operate a business in Iowa and reside across the border you still may use our program.