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
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?
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?
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
- San Francisco Small Business Development Center
Sign Up for an appointment today at http://nc.ecenterdirect.com
Micro Lenders / Community Lenders
San Francisco Revolving Loan Fund (RLF)
440 Pacific Avenue,
San Francisco, CA 94133
Corinne Gentile, Client Intake and Loan Processing Associate
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
- Sandy Mackovich, Business Development Officer, 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 415-655-5472 or email her at email@example.com
San Francisco Emerging Business Loan Fund Program (EBLF)
Bay Area Small Business Finance
Spear Tower, Suite 3603
San Francisco, CA 94105
Darius Mahajer, Director of Business Development
Bay Area Small Business Finance manages the EBLF for the City and County of San Francisco. The purpose of the EBLF is to originate commercial loans that support high impact businesses and projects with the potential to increase economic activity in San Francisco as well as create jobs for low to moderate income individuals.
- Loan amounts from $50,000 – $1,000,000.
- Interest Rates: Currently from 4.5% to 7.25% percent (Prime + 4%), depending on product, no application fee, low closing costs.
- Up to 10 year loan amortizations, longer with real estate.
- Flexible underwriting criteria, eligible uses include working capital, equipment, real estate, tenant improvements.
Southeast Asian Community Center
875 O'Farrell St
San Francisco, CA 94109
- 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.
BASBF 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, BASBF:
- 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
Central Market Cultural District Loan Fund (CDLF)
Office of Economic and Workforce Development
Amy Cohen, Director of Neighborhood Business Development
Phone: (415) 554-6649
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.
Call Gloria Lando to set up an appointment (se habla español)
785 Market Street, Suite 1700 (@4th St)
San Francisco, California 94103
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
Valley Economic Development Center (VEDC) is a non-profit lender that offers direct micro and small business loans. Their Small Business California Loan Program offers loans ranging from $50,000 to $500,000 for existing businesses in operation for at least 2 years. Please contact Michel Ottolia for more information.
Pacific Community Ventures
51 Federal Street
San Francisco, CA 94107
Phone: (415) 442-4300
Fax: (415) 442-4313
Pacific Community Ventures’ Small Business Advising Integrated Lending Loan Fund (SAIL Fund) provides debt capital and resources to Bay Area businesses that create jobs and opportunities in lower-income communities.
- Small Business (incorporated in the United States and located in the Bay Area) with the potential to scale
- Minimum two-year operating history with annual revenues between $250,000 and $5 million
- Minimum of two employees
- Alignment with PCV’s mission to create jobs and economic opportunities in lower income communities
- Loan amount: Minimum $50,000 to maximum of $250,000 at 7-10% fixed rate per year
Northeast Community Federal Credit Union
683 Clay St
San Francisco, CA 94111
- 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)
- 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.
150 California St, Ste 250
San Francisco, CA 94111
- SBA 504 Loans
- Loan Calculator
Bay Area Development Company
1801 Oakland Boulevard
Walnut Creek, CA 94596
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.
|Wells Fargo*||Steve Young||415-396-6551|
|Bank of America*||Tam Thach||415-216-0781|
|Mechanics Bank||Scott Cunningham||925-256-3060|
|US Bank*||Ole Tustin||415-357-1767|
|First Bank*||Ron Mitchell||415-273-2020|
|Union Bank*||Small Business||415-550-9312|
|Banco Popular*||Mark Decius||415-206-1800|
|Redwood Credit Union*|| |
415-861-7928, ext 234
|Circle Bank*||Carlos Rivera||415-268-5253|
|Sterling Bank*||Keith Shiver||415-773-1530 ext. 49132|
* SBA Lender
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.
Lenders for Nonprofit Organizations
The following lenders provide loans for nonprofit organizations:
Northern California Community Loan Fund
SF Finance Fund
Nonprofit Finance Fund
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