"THE ABILITY to repay the funds you request must be justified in your loan request," said Tamarah Bacon, business development and assistance manager for SEED Corp. gives her advice on loan financing.
COURTESY SEED CORP.
By Michael Souza PBN Staff Writer
Tamarah Bacon is the business development and assistance manager for the South Eastern Economic Development Corp., or SEED Corp., She took the time recently to discuss their small-business loan programs and to offer advice on loan financing.
PBN: Briefly, what products does SEED offer?
BACON: As a regional nonprofit economic-development corporation, the South Eastern Economic Development Corp. focuses on job creation by financing all types of small businesses in Rhode Island and Massachusetts. SEED makes loans ranging from a $1,000 micro-loan to a $5.5 million Small Business Association 504 loan and also administers a small business technical assistance program.
PBN: Are there any particular special programs going on now?
BACON: Yes, the Temporary 504 Loan Refinancing Program. Under the Small Business Jobs Act, the SBA has implemented a temporary program, authorized until Sept. 27, 2012, which allows small
businesses to refinance eligible fixed assets in its 504 program without requirement of an expansion. The program provides small businesses the opportunity to lock in long-term, stable financing, and finance eligible business expenses as well as protect jobs and hire additional workers.
PBN: What are some of the advantages SEED has to offer?
BACON: SEED offers fixed, low-interest rate loans to both start-up and existing businesses in the manufacturing, retail, wholesale and service industries, including home-based businesses.
SEED also offers free basic entrepreneurial workshops designed to help you start or grow your business. These workshops are offered in cooperation with the sponsoring bank or credit union, the Rhode Island & Massachusetts Small Business Development Centers, SCORE and the local chamber of commerce.
PBN: SEED talks a lot about its microloans. What do they have to offer?
BACON: Under the Micro Loan Program, SEED provides loans up to $50,000 at 6 percent fixed for six years with no prepayment penalty. The funds may be used for working capital, machinery and equipment, furniture and fixtures and refinancing of business credit card debt.
PBN: What advice do you have to offer to small businesses seeking financing?
BACON: Before applying for a loan, be sure that you understand your financial situation and needs. The ability to repay the funds you request must be justified in your loan request. Be sure to check your credit. SEED will consider credit scores of 600 and above. Also, be prepared to put some of your own money into the business. Do not be misled into thinking that a start-up business can obtain 100 percent financing. Collateral is also required to secure a loan of $10,000 or more. If a potential borrower does not have collateral, he/she will need a co-signer who has collateral to pledge. Lastly, relevant industry experience is a critical element in the success of your business and will be considered during the review process.