Below you will find some of the questions that we get asked a lot. Please take time to browse through our responses. They are arranged by topic, and if you click on the heading listed below, you will go directly to that section.
Q: How much can I borrow?
A: CEED Capital offers loans ranging from $2500 to $200,000.
Q: How long can the term of my loan be?
A: From 1yr up to 20yrs. The term of your loan depends on the loan amount and purpose, among other factors.
Q: What kind of loans do you offer?
A: CEED Capital offers installment loans (equal monthly payments of interest and principal) for start-up and established businesses, balloon loans (equal monthly interest payments followed by a final lump sum), and CEED Builder loans ($2500 loan for business owners with severely damaged or no credit history).
Q: What can I use the money for?
A: The loan request must be directly related to the business, i.e. leasehold improvements, inventory, equipment, supplies, or working capital. NOTE: Debt consolidation and purchase of property are not usually eligible loan requests. An explanation for the of funds is required.
Q: Do you provide non-business loans?
A: No. You must be employed or self-employed in order to qualify for a loan with CEED Capital.
Q: Do you give grants?
A: No.
Q: How long does the application process take?
A: Our loan process may take a minimum of 60 days. The overall length of time is dependant on how quickly the applicant turns in complete requested information. Applications received with no activity for over 30 days will be canceled from the process.
Q: Does CEED Capital have a special program for minority and/or women-owned businesses?
A: While CEED Capital does not have any programs specifically targeting women or minorities, we encourage female and minority entrepreneurs to approach us for financing. Half of our clients are female, and over 75% of our loans go to minority entrepreneurs. Furthermore, CEED Capital complies with the Equal Credit Opportunity Act: “The Federal Equal Opportunity Act prohibits creditors from discriminating against applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided that the applicant has the capacity to enter into a binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.”
Q: How can CEED Capital help me to rebuild my credit?
A: CEED Capital understands that not every small business owner has perfect credit, and this can present an obstacle when the business owner is applying for financing. CEED Capital offers a Credit Builder Loan that will help you to grow your business and build a positive credit history. If you have a poor credit history and you are serious about repairing it, our Credit Builder Loan may be perfect for you! The Credit Builder Loan is a business loan of up to $2,500 and credit repair is an important part of the application process. In order to show your commitment to repairing your credit, CEED Capital may require that you either pay one or more collections in full, or enter a collection into a payment plan before the loan is disbursed. In the rare case CEED Capital will allow you to use 30% of the loan (or up to $750) to pay off your existing debts. The combination of repaying your debts and the development of new credit through the Credit Builder Loan allows you to strengthen your credit while also growing your business. For more information or to pre-qualify for a Credit Builder Loan call us at (910) 323-3377!
Interest Rates and Fees
Q: What are your interest rates?
A: Our rates range from 5% to 18%. Once you submit an application, your loan officer will inform you of your likely interest rate depending on the fund for which you qualify. We have one loan application for all loan funds; Once you submit an application, your loan officer will inform you of your likely interest rate depending on the fund you qualify for.
Q: How much are your fees?
A: At the time of application, there is a one time, non refundable $125 application fee. If your loan application is approved, CEED Capital will charge a one-time closing fee in addition to collateral filing fees. These fees are due at closing. Late payments incur a penalty of 4% of the total amount overdue.
Eligibility
Q: What are the basic qualifications of all business loan applicants?
A: The basic qualifications for all business loan applicants are:
- Must be the business owner or co-owner
- Must demonstrate a strong commitment to the business and to repaying CEED Capital
- Must have invested some savings or personal equity in the business.
- Must exhibit a clean or improving payment history with creditors
- Must generate sufficient income to service new debt
- Loan must be for business purposes only
- Conduct a profit or non-profit business (Based on a case by case basis)
- Must live and work in North Carolina.
- Must be 21 years of age or older, or older than 18 with qualifying co-signer.
Q: What would make an applicant INELIGIBLE?
A: The following would make an applicant INELIGIBLE:
- Outstanding tax liens (If you are on a payment plan, please mention this to your loan officer.)
- Active bankruptcy
- Business involved in lending, adult businesses, firearms, real estate development, or multi-level marketing programs
- Delinquent mortgage, rent, or child support, or multiple recent charge-offs and delinquencies
Q: What types of businesses are eligible to apply for a loan?
A: As a community-based organization, CEED Capital offers assistance to many different types of businesses, most commonly service and retail businesses. However, businesses that engage in weapons sales, real estate development, money lending or financing, multi-level marketing programs, illegal or polluting activities, or adult entertainmnet are among those that are not eligible.
Q: Can a new business qualify for a loan?
A: Yes. New (or start-up) businesses qualify for a maximum of $20,000. A start-up business is defined as one that has been in operation for less than six months. In addition to the application, CEED Capital requires a business plan, one year of cash flow projections, and a minimum personal investment of at least 10-20% by the new owner. Additionally, start-up business owners must have industry experience and an alternate source of income.
Q: Do I qualify for a loan if I have bad credit?
A: CEED Capital considers your credit history in the context of your whole application. We do NOT base our decision on a single credit score. We examine credit history on a case-by-case basis; weak credit may be compensated by other strengths in your application. However, we generally require that you are actively making payments on any outstanding debt that you currently have with other creditors.
Q: Can I obtain a loan to buy a business?
A: Yes. CEED Capital classifies this as a “new business,” and therefore requires a business plan, one year of cash flow projections, and a minimum investment of at least 20% by the new owner in order to apply for a loan up to $20,000. CEED Capital also requires a legally-binding buy-sell agreement.
Q: Does CEED Capital require collateral?
A: Yes, loans must be fully secured by collateral or guaranteed by a qualified co-signer. All personal and business assets may be used as collateral.
Q: Why might I need a co-signer?
A: A co-signer provides a little bit of insurance for CEED Capital and can strengthen your loan in the event you, the applicant, have weak credit or weak collateral. Additionally, if something should happen to you or your business, it helps CEED Capital to know that there will be someone there to help you. Remember, as long as you are paying your loan on time, your cosigner will not be contacted by CEED Capital.
Business Plans
Q: What is a business plan?
A: A business plan is a written document that outlines the specifics of your enterprise. This includes information on the mission of your business, its products/services, the market that it serves, the competition, and the goals and obstacles that your business may face in the future.
Q: Do I need a business plan to apply for a loan?
A: For businesses that have been operating for less than six months, a detailed business plan with cash flow projections that cover at least 12 months is required. If you are applying for a loan of less than $4,000 for your start-up business, a very brief informal business plan will suffice. If you are applying for more than $2,500 and you need Business Plan assistance please contact our Women’s Business Center.
Q: What if I have additional questions?
A: Please feel free to contact us – call us at (910) 323-3377, or email us at info@ncceed.org.
