Frequently Asked Questions
Virtually any type of for-profit small businesses is eligible for the MicroLoan Program. It must, however, meet the SBAs size standards at the time of application
How can a business receive technical assistance and is it costly?
Call Cooperative Business for technical assistance for a new or expanding business. In order to receive the full benefit of technical assistance you must be willing to make a one to three month investment of your time.
Use of Loan Funds?
MicroLoan funds may be used for working capital or to purchase inventory, supplies, machinery, equipment, furniture, and fixtures. These funds may not be used to purchase real estate or provide for down payments on equipment or vehicles otherwise leased or financed by others. With limited exceptions, the funds can not be used to refinance existing debts.
How does Cooperative Business provide Financing?
Loans are provided in a variety of ways. They can be provided directly by the Cooperative Business Assistance Corporation or for larger loans we will participate with a bank and other funding sources including the New Jersey Economic Development Authority and the U.S. Small Business Administration. Cooperative Business packages the total loan request to assist you in meeting your complete financing needs.
What can the loan be used for?
- Working Capital
- Real Estate
What about collateral or security for the loan?
Cooperative Business will obtain the best available collateral and security, and will cooperate with the lending partners to obtain financing for the request.
Each owner must personally sign and take full responsibility for the loan.
What is important for a successful application?
- Demonstrated ability to repay the loan.
- Having a good credit history is the ideal, but having no or some negative credit will not necessarily disqualify an applicant.
- Ability to create jobs and renovate or build business real estate.
- Realistic start up or expansion plan.
SBA 504 Loans
The 504 Program helps small, growing businesses to create and retain jobs by providing long term, fixed-rate financing through Associate Development Corporation; like Cooperative Business Assistance Corporation.
Under the 504 Program, borrowers must create or retain one job for every $35,000 of debenture proceeds provided by SBA. Money under this program maybe used.
- To acquire land, buildings, machinery, and equipment.
- For building, modernizing, renovating, or restoring existing facilities and sites.
Who is eligible for the 504 Program?
- A business who is a for-profit corporation, partnership or proprietorship.
- The businessâ€?net worth cannot exceed $6 million.
- The average net profit after taxes cannot exceed $2 million for the previous two years.
Who provides the loan?
A 504 loan is a cooperative venture with three parties.
- 50% of the loan (the first lien) comes from a financial institution, at market rate, and paid back over a 7-10 year period.
- 40% (second lien) comes from the 504 Program at a fixed rate and is payable over a 10-20 year period.
- 10% is the borrowerâ€™s minimum contribution as an equity or investment.
Technical Assistance For more information, click here!
Cooperative Business can offer you technical assistance!
- As a resource for professionals and firms who work with small businesses.
- Setting up a financial bookkeeping system.
- Designing a marketing strategy.
- As a resource for government programs and regulations.
- Locating sources to hire a qualified workforce.
- Evaluating financial performance.