Business lending does not come in a “one size fits all” format. Here are some considerations for finding a loan that is appropriate to your needs.
If you believe you are “bankable” your first call should be to your local bank. While there are many good non-bank lenders around that can greatly assist small businesses, for most purposes banks will be your cheapest and best option. We recommend starting with the bank with which you already have a good relationship, but getting a term sheet from a second or even a third bank is never a bad idea. Different banks have different priorities and different goals so you may find that one is willing to give much better terms for your project than another.
If you suspect you may not be bankable (past bankruptcy, overleveraged, etc.) don’t despair! There are some very good lending sources that specialize in helping businesses with these types of issues. Be aware, however, that these lenders will typically charge a higher interest rate to make up for the fact that they are taking on a higher level of risk than the banks. So, do yourself a favor and check with your bank first if you think you are bankable.
There are a number of non-profit organizations who offer loans to businesses with less than perfect credit. Each of these programs offer different loan packages so you will need to check with them to find out which ones will work best for your needs.
We’ve found that many projects require more than one lender. A bank may take a portion of the debt while one of the non-profit lenders provides the rest. The non-profit lender’s position will often be subordinate to the bank – meaning that in the event of a default the bank will get paid back first with the non-profit getting paid only if there is something left at the end. This is one of the reasons that you will pay more for many of the non-profit lending programs – they often stand to lose a lot more than the bank.
As always, our office is willing to help you navigate through all of these programs. We will direct you to the program we think most appropriate, and help you every step of the way. We have lots of experience in helping businesses, large or small, put together financing packages to fit their needs. Let us help – that is what we are here for!
Local Non-profit lenders:
CEI, Inc.
One Cumberland Place, Suite 201
Bangor, ME 04401
(207) 217-6555
http://www.ceimaine.org/
Eastern Maine Development Corporation
40 Harlow Street
Bangor, ME 04401
(207) 942-6389
(800) 339-6389
http://www.emdc.org
Mainestream Finance
262 Harlow Street
PO Box 1162
Bangor, ME 04402-1162
(207) 973-3500
(800) 215-4942
http://www.mainestreamfinance.org/