Q: I have bad credit; can I still apply for a loan through MetroAction?
A: MetroAction requires a base credit score of at least 500. If you’re not sure what your credit score is, use MyFico’s Credit Score Estimator to get a free credit score estimate. You can also obtain a free copy of your credit report once each year by using AnnualCreditReport.com. There is a small fee to get your credit score, though. The approval process for our loan programs takes a number of factors into consideration, not just your credit score.
Q: Are there any small business grants for starting or expanding a business?
A: We understand that you may have heard about grants to start or grow small businesses. The truth is, small business grants are uncommon, even for women or minority owned businesses. Most federal and state programs for small businesses are loan programs and the funds must be repaid. Please take caution with any service that requires you to pay for grant resource information. If grant programs become available, we will post the information on our website.
Q: How is MetroAction different from banks and other lending sources?
A: MetroAction is a non-profit community development financial institution (CDFI) with flexible loan requirements. We work hand-in hand with banks, community and economic development organizations to provide loans to start-up and expanding small businesses in Northeastern Pennsylvania. MetroAction staff provides one-on-one counseling to ensure that your application is processed as quickly as possible. After the loan is approved, our staff continues to work with you throughout the term of your loan to help you improve your credit and grow your small business.
Q: How long does the loan process take with MetroAction?
A: Small business loans are very different from other types of loans such as personal loans or home equity loans. Our loan review committee evaluates each application based on the business plan, application and other required documents. It generally takes a minimum of 30-60 days to complete the process. In complete applications may extend the time needed to complete the review process.
Q: How can I get my application processed more quickly?
A: The most common reason a loan request will be delayed is missing information in the application package. To expedite your loan request, ensure that every section on the application is completed with as much information as possible. Also, make sure that you include all required documents that are listed on the application checklist.
Q: Do I need to pledge collateral to obtain a small business loan?
A: Collateral is recommended for all loans but is required for loans that exceed $10,000. In addition, providing collateral to secure your loan will improve your chances of obtaining larger loan amounts. MetroAction will consider: real estate property, machinery and equipment, personal property, and whole life insurance policies, with a cash value. Each loan will require personal guaranties from all principals and possibly, their spouses. You can also use cosigners to strengthen your loan application.
Q: What should I include in my business plan and cash flow projections?
A: Our small business loan application includes a detailed outline of the information that needs to be included in your business plan. MetroAction staff is also available to provide you with one-on-one counseling and small business assistance in developing a business plan and cash flow projections. Ultimately, your cash flow projections must prove that the business will be able to repay the loan obligation.