EDC’s Microloan Program provides funding for small businesses who cannot yet qualify for conventional bank financing.
Our goal is to assist both start up and expanding businesses succeed by providing both financing and on-going technical assistance.
Terms Our program provides small business loans up to $25,000 for businesses located in Boone, Callaway or Cooper Counties.
The loans are funded at a fixed interest rate, currently 8.5%, and have no penalty for early repayment.
The term of the loan can be from one to five years.
Use of Loan Proceeds The loan proceeds can be used for working capital, and the purchase of inventory, equipment, furniture and fixtures.
The loan proceeds cannot be used to refinance existing debt, pay an owner’s salary, for down payment on real estate or for leasehold improvements.
Qualifications In order to qualify for a microloan, the small business must be a for profit business, located in one of the three counties listed above and cannot qualify for adequate conventional financing.
Other factors that would disqualify a business applicant are: convicted of a civil or criminal offense; past due on a government loan (including student loans); past due on child support payments; and recent bankruptcy.
Credit, Collateral and Equity Injection Microloan applicants are expected to demonstrate their creditworthiness – that there is is a reasonable assurance that the loan will be repaid.
Enterprise does not use a minimum credit score to determine eligibility.
Rather an applicant’s credit history will be reviewed and reasonable circumstances surrounding an adverse credit situations will be taken into consideration.
How an applicant has handled debt obligations in the past, or following any adverse credit situation, is very important.
Microloans also require collateral, including a personal guaranty from the entrepreneur.
While specific collateral requirements vary in each circumstance, collateral is necessary to show that the applicant is willing to assume some of the risk for their business loan.
Equity injection, or the borrower’s contribution of funds into the project, is also required for microloans.
Enterprise does not use a set percentage of down payment, and the amount may vary in each circumstance, but the applicant’s willingness to contribute their own funds into the project demonstrates their commitment to their business venture.
Enterprise Development Corporation
Address: 910 E Broadway, Ste 201