Access to Capital with ECDI

Recently, Haven Members had the opportunity to connect with Aminata Soko and Ken Johnson of ECDI (Economic and Community Development Institute), a local nonprofit dedicated to helping connect entrepreneurs with the funding and education they need to be successful. One key takeaway from our conversation was the need for entrepreneurs to be ready as they seek access to capital, specifically through lending opportunities.

Here are a few of the ways that you can get ready for the ECDI lending process through micro-lending or SBA loans:

1. Be prepared to personally guarantee the loan you are seeking. (A personal guarantee is an individual’s legal promise to repay credit issued to your business.)

2. Ensure your personal credit score is sufficient (recommended 590+). You can request a free credit score here if you are unsure where you’re starting from.

3. Understand your capital needs. This is where a business plan and a good understanding of your numbers come in handy. You won’t want to overborrow and you’ll want to know exactly how you plan to repay the loan. ECDI offers support to create your business plan if you don’t know where to start. Businesses that have been established for more than 3 years may not need a business plan, but it is always a good exercise so give it a go.

4. Make sure that you can show your own investment in your business exceeds the collateral and equity injection requirement of about 12%. That means that you should have invested at least 12% of your loan request in your own business, which can be shown in multiple ways including via a savings account.

5. Be prepared for training to be a requirement of the loan. Many entrepreneurs know a lot about how to do the work of their business but when they are just starting out, they may not have a lot of experience running one. That’s where ECDI’s training comes into play.

6. Remember to submit reports as required. Some loans will come with additional reporting requirements such as job creation activity. Each loan will have different requirements, so just be prepared for them after you’ve accepted the terms.

ECDI offers access to capital through multiple programs. a few of the ones that may be of interest to you at this time include (As of 9/23/21):

• Microloan Program for Small Businesses: can be used for inventory, equipment, working capital, etc.

  • Businesses under 2 years old can borrow up to $75,000. (Up to $500,000 for businesses 2 years or older)

  • Loan terms are 6-66 months with no prepayment penalty

  • Fixed interest rates from about 7.25%-12.25%

• SBA Community Advantage

  • Borrow from about $50,000-$250,000

  • Qualifying SBA Score is required

  • Loan terms up to 10 years

  • Interest rates = Prime +6%

To get started in the application process for one of their lending programs, you’ll want to start here.

One of the benefits of working with ECDI on your lending is that they guide you throughout the process and if for some reason you are denied the initial loan request, they are there with programming to help you get set up for success in the future. While these programs are currently only offered to for-profit businesses in Ohio, many of the workshops are held virtually and are free so many entrepreneurs can access their support services from anywhere. Check out this virtual programming here.

Learn more about ways you can grow your business by joining Haven’s membership today. We look forward to meeting you!