Megan's Story

Community Advantage Loan

Megan’s story is an example of the Community Advantage Loan. Even though her story may be slightly different from yours, we encourage to consider the flexibility of this direct loan through SCKEDD.

Megan had been operating for less than three years in her startup after leaving her former mentor.  She had considerable experience in the industry but not as a business owner. She was interested in purchasing additional equipment to expand her growing business.

 

By all accounts most banks considered her to be a startup with limited industry experience. She approached her existing bank but was short on collateral due to a limited time in business. Her banker contacted SCKEDD – a local non-profit lender – and asked them to look at her expansion project.

 

Megan began working with the SCKEDD team providing an updated business plan, financial projections, and completing a loan application. After her project was approved for an SBA Community Advantage Loan she borrowed what was needed for both equipment and additional working capital.

 

General business loans using Community Advantage Loans

A Community Advantage loan is a loan designed for individuals that are currently dealing with financing challenges for their businesses. It’s an SBA 7(a) loan that is financed by a mission-based lender, like SCKEDD, rather than directly through a bank. A Community Advantage Loan can offer financing from $50,000 to $250,000 for a variety of business needs.

THE PROCESS for a Community Advantage Loan

  1. Submit your completed Community Advantage loan application, signed Community Advantage Disclosure document, business plan, and financials so SCKEDD may begin underwriting.

  2. Once the package is ready, SCKEDD will submit it first to the SCKEDD loan committee, then submit it to the SBA for approval.

  3. SCKEDD will close and fund your loan as your lender and will service your loan for its lifetime.

ELIGIBLE USES

Qualified borrowers can use Community Advantage loan funds to finance

  • Startup expenses

  • Long-term working capital – up to 10 years

  • Purchase equipment, inventory, furniture, and fixtures

  • Business acquisition

  • Buy, build or renovate commercial real estate – up to 25 years

  • Debt consolidation and refinance

REQUIREMENTS

Requirements for community advantage loan

You may qualify if you and your business meets the following criteria

  • The business is for-profit

  • The business is in Kansas

  • The business is valued at less than $15 million and the business has an after-tax profit of less than $5 million a year over the average of two years

  • The business owner will occupy 51% or more of commercial real estate that is being renovated or purchased

  • The business has demonstrated a need for credit

What should I know about your Community Advantage loans?

Preference will be given to applicants that are

  • Located in low-to-moderate income census tracts, empowerment zones, enterprise communities, or HUBZones

  • Businesses where more than 50% of the full-time workforce is low income or resides in low-to-moderate income census tracts

  • Businesses that are new or less than two years old

  • Businesses that are more than 50% owned by veterans, minorities, or women

  • Businesses located in rural communities

 

RATES and FEES

Interest rates

Our Community Advantage loan program has an adjustable interest rate of Wall Street Journal Prime rate + 4.50%, with quarterly adjustments based on changes in the prime rate. Consult current Wall Street Journal Prime rates.

Fees

There are generally three fees a small business borrower will pay for this loan. All fees can be financed as part of the loan.

  1. Guarantee Fee of 2% on the guaranteed portion of loans $150,000 or less; Guarantee Fee of 3% on the guaranteed portion of loans $150,001 to $250,000

  2. Packaging Fee paid to SCKEDD on 2% of the loan amount or $2,500, whichever is lower

  3. Any direct or third-party closing costs associated with the loan

 

Interested in learning more?

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