Step 6. Finance Your Business

After developing your business plan, you should already know all your expenses, both one-time startup expenses and ongoing cash requirements. You should itemize each purchase and expense and resource its realistic cost. With cash flow in hand, you will need to find capital to finance your business. This could be in any form, including bank loans, personal savings, and family contributions.

Before you ask for a loan from a financial institution and/or alternative lender, are you prepared to answer their questions?

Loan Preparation Questions

Business Planning
1. What products/services does your business offer?
2. What are your revenue expectations over time? How many units do you have to sell and at what price to reach those expectations?
3. What are the expenses of the business?
4. What does the cash flow model of the business look like - when do you have to pay for expenses and when will you be paid for your products/services?
5. Who are your customers, and how do you define your target market?
6. How are you planning to market to your customers?
7. Who is your competition, and how are you different?
8. If your business is in a commercial space, where is it located? What are the terms of your lease?
9. What systems do you have in place to manage your financials? Your employees?
10. Do you have all the required permits and licenses for your business?
11. If you are acquiring an existing business, what is the acquisition price based on? Do you have copies of the previous owner's tax returns and/or financial statements?

Is a Loan the Right Answer?
1. What specific items would you purchase with a loan?
2. If you're looking for "working capital," what is happening in the business (new expansion, unexpected losses) that is causing the need?
3. What assets (inventory, equipment, cash) and liabilities (accounts payable, credit cards, loans) does your business currently carry?
4. How much money are you able to contribute to the business from savings and/or home equity?

Personal Finances
1. What are all sources of income into your household?
2. What are all the expenses of your household?
3. Is your household income sufficient to cover all household expenses?
4. If you own a home, what kind of mortgage do you have? Do you have any equity available to use as collateral? If you have a negatively amortizing loan, what are you plans to manage your monthly payment if/when your bill increases?

Credit
1. What is your credit score?
2. What is your impression of you credit score and what are your plans to improve your score over time?
3. Do you have any recent late payments or accounts currently in collection?
4. Have you ever declared bankruptcy? If so, explain what was happening in your life at the time.
5. How much credit card debt do you currently carry? Are you trying to consistently pay down your principal balance?

For Credit Check and Repair Counseling, contact SCORE or SBDC

• SCORE
  415-744-6827
  sfscore@sfscore.org
  
  
• San Francisco Small Business Development Center
  415-841-4050
  Sign Up for an appointment today at http://nc.ecenterdirect.com

Micro Lenders / Community Lenders

San Francisco Revolving Loan Fund
TMC Working Solutions
611 Front St
San Francisco, CA 94111
www.tmcworkingsolutions.org
Sandy Mackovich, New Business Development Officer
415-655-5472
sandy@tmcworkingsolutions.org

Working Solutions provides the SF Revolving Loan Fund, microloans from $5,000 to $25,000 with a fixed interest rate between 4-6%.

• SBA Microloan; San Francisco Revolving Loan Fund
• Program Director Emily Gasner is available to give educational presentations for free on access to capital at venues in the Bay Area. If you would like her to speak at your event, please call 415-477-8415 or email her at emily@tmcworkingsolutions.org
  

Central Market Cultural District Loan Fund (CDLF)
Office of Economic and Workforce Development
Amy Cohen, Director of Neighborhood Business Development
Phone: (415) 554-6649
Email: amy.b.cohen@sfgov.org
http://www.oewd.org

The Central Market Cultural District Loan Fund (CDLF) will enable the City and County of San Francisco to provide $11 million in HUD Section 108-guaranteed loan proceeds to support eligible projects that will contribute to the stabilization and revitalization of the Central Market and Tenderloin area. A primary emphasis will be on financing businesses and development projects that will enhance the area’s cultural arts and entertainment functions, building on the economic assets already there and focusing on industries that have the ability to create and/or retain jobs for low- and moderate-income people.

• HUD Section 108-Guaranteed Loan
• Click here for details about this loan.
  

OBDC Small Business Finance
825 Washington Street
Suite 200
Oakland, CA 94607
510-763-4297
www.obdc.com
Jason Soto, jason@obdc.com

OBDC Finance offers commercial loans to start-up and existing businesses in the San Francisco Bay Area. All loans are fully-amortized term loans at fixed competitive interest rates offered to firms unable to obtain conventional financing. In addition to providing small business loans, OBDC offers pre-loan advising, and access to a network of trusted business resources. Through partnership support and lending activities, OBDC Finance:

• Provides loans to businesses unable to qualify for conventional financing
• Offers co-lending opportunities with conventional and alternative lenders
• Effectively deploys capital to low and moderate income entrepreneurs
• Finances startup firms to become “bankable”
• Retains and creates jobs in local and surrounding Bay Area communities
• Reduces and transforms blighted neighborhoods by financing commercial redevelopment activities

Opportunity Fund
http://www.opportunityfund.org/small-business-loans/loans-and-services
Call Gloria Lando to set up an appointment (se habla español)
785 Market Street, Suite 1700 (@4th St)
San Francisco, California 94103
1-866-299-8173
1-408-297-0204

Opportunity Fund provides loans from $1,000 - $10,000 with interest rates that range based on the size of the loan. Opportunity Fund offers a $1,000 - $2,000 credit builder loan for people that have bad credit, which helps build a good credit history.
* Opportunity Fund can provide loans up to $200,000 for entrepreneurs with existing businesses, good credit and collateral.

• Small Business Loans
• IDA Savings
• Commercial Real Estate Loan Program
  
  

Southeast Asian Community Center
875 O'Farrell St
San Francisco, CA 94109
Victor Hsi
415-885-2743

• SBA Micro-loans
• SEACC is a non-profit community agency that provides technical assistance and commercial loans of up to $35,000 to low-income entrepreneurs and small business owners.

Northeast Community Federal Credit Union
683 Clay St
San Francisco, CA 94111
www.necfcu.org
Lily Lo
Brian Ye
415-434-0738

• Small Business Loans
• Northeast is a non-profit, member-owned, federally insured, community development credit union formed in 1981. Northeast offers affordable loans to its members with savings accounts of $100 or more.

Mission Economic Development Association (MEDA)
415-282-3334
www.medasf.org

• MEDA is dedicated to economic justice with its efforts focused on the Latino community and the businesses and institutions that serve them. MEDA offers microloans up to $10,000.

Capital Access
150 California St, Ste 250
San Francisco, CA 94111
www.capitalaccess.com
Bryan O'Hagan
415-217-7600

• SBA Microloan
• Loan Calculator 

Bay Area Development Company
1801 Oakland Boulevard
Suite 100
Walnut Creek, CA 94596
(888) 504-0504
www.baydevco.com

BADC specialize in providing 504 financing to small businesses throughout Northern California. 504 loans are long-term commercial real estate financing with fixed, below-market interest rates and low down payments. 

Conventional Institutions

* SBA Lender

OTHER PROGRAMS

WISE's Matched Savings Account - IDA Program
Individual Development Account (IDA) is a special savings account that combines free financial training and a grant of up to $4,000 to help you achieve your asset goals. The potential for matched funds is big. As an account holder, you can save up to $2,000 of your own dollars and receive up to $4,000 in matching dollars. That means you can save $6,000! The IDA program allows participants to save money and invest the funds for small business development, education or first-time homeownership.

For more information about this program, visit
http://www.womensinitiative.org/clients_alumnae/ida_program.htm
http://www.l4cd.com/

WISE also has other programs: Leaseholder Grant and Loan Fund to help finance your small business.

MEDA Microloan Program
Microloan Program - In partnership with the Opportunity Fund. Key eligibility requirements are that the business owner must be low or moderate income and the business must be a microenterprise (5 or fewer employees). This loan is targeted toward Spanish-speaking entrepreneurs that have difficulty accessing capital from other sources.
http://www.medasf.org/ProgramsandService(BusinessDevelopment).html

Lenders for Nonprofit Organizations

The following lenders provide loans for nonprofit organizations:

Northern California Community Loan
Mary: 415-392-8215

SF Finance Fund
415-255-4849

Traditional lending institutions, such as larger banks, also lend to nonprofits.

Go to the next step: Step 7. Leverage City Incentives

Small Business Assistance Center, City Hall, Room 110, 1 Dr. Carlton B. Goodlett Place, San Francisco, CA 94102
Phone: 415-554-6134 Office Hours: M-F, 8 AM - 5 PM