Whether expanding or consolidating, you need to have cash on-hand to execute your strategy as a business undergoing or considering change. Your existing cash flow may not be enough to take you where you want it to go. That is where a business loan can be crucial to your business’s success.
But what kind of loan can you apply for, and what preliminary information do you need to prepare? Applying for a loan can be stressful. Pulling together the information required to complete the application can seem time-consuming, discouraging, and frustrating. It can take you away from running your business and drain your energy. But with a list of steps to get you organized, you’ll find that being well-prepared speeds the process and can help reduce your stress.
AEDC’s Loan Program Manager, David Dunn, has worked with dozens of budding businesses and established business owners. Dunn assists eligible borrowers with the necessary resources to access capital and funding as part of AEDC’s Urban Made program.
Applicants who are or will be located in Allentown, have access to three local funds each with loan amounts up to $100,000: The City of Allentown Enterprise Zone Loan Fund, The City of Allentown Economic Development Loan Fund, and The Allentown Development Corporation Loan Fund. Funds can be used for equipment, real estate purchases/improvements, and in special cases, up to 40% of inventory or working capital. Job creation and retention are essential components of all these loan funds.
However, the options for borrowers don’t end there. AEDC also administers a Revolving Loan Fund Program for the Pennsylvania Minority Business Development Authority (PMBDA). Applicants located in Lehigh and Northampton Counties and who qualify as socially or economically disadvantaged minorities are eligible to apply for up to $250,000 in financing through this program.
Whether applying for a local fund, or a state fund, we’ve got the list of requirements.
Straight from the Desk of Dunn, here are the things you should have on your checklist in the early stages of the loan application process:
Preliminary Information
- Are you formally incorporated as an LLC, C, or S-Corp? If not, you must obtain legal business status – from the State. If you are in a partnership, is the fictitious name filed with the State, and do you have a formal agreement for your entity? Is your status current, and can you obtain a certificate of ‘good standing’?
- Do you have a DUNS number? If not, apply for free through Dun & Bradstreet. It is a unique nine-digit identification number, for each physical location of your business. We use your DUNS numbers to run your business’ credit report.
- Do you know your NAICS code(s)? According to the SBA website, The North American Industry Classification System (NAICS) classifies business establishments to collect, analyze, and publish statistical data related to the U.S. economy. The NAICS industry codes define establishments based on the activities in which they are primarily engaged. You can go to NAICS.com and search for yours free of charge. These codes let us compare your performance against industry standards.
One Step Closer
Congrats! You’ve compiled the preliminary information! Unfortunately, you’re not quite ready to pass GO and collect $200 yet- but you’re getting closer! Next, you will need to gather your financials and prepare for the application questions. We’ll share tips for organizing your financial documents next!
Applying for a loan is more than just preparing paperwork. It is an opportunity to look at your business objectively, historically and prospectively, in real-time. Your loan application is a primary step and part of the plan to pursue new opportunities that will help grow your business. Being organized with preliminary documents will make all the difference, so you can continue to focus on the daily needs of your business.
What type of loan options are available? Under the Urban Made program, loan applicants have access to three local funds for up to $100,000: The City of Allentown Enterprise Zone Loan Fund, The City of Allentown Economic Development Loan Fund, and The Allentown Development Corporation Loan Fund. The options for borrowers don’t just end there. AEDC also administers a Revolving Loan Fund Program for the Pennsylvania Minority Business Development Authority (PMBDA). Applicants who qualify as socially or economically disadvantaged minorities can apply for up to $250,000 in financing through the PMBDA loan program.
