SOHO Loan Program

Sue Malone of Strategies for Small Business, LLC of San Francisco, CA joined us at Expo 2003 to provide SOHO loan application opportunities to Expo participants directly from her booth in the exhibit hall. How's that for service? Sue also was among the panelists in the "Small-based Business Financing - Panel Discussion" session. Joining her on that panel were Angela Lindsay-Johnson of Wells Fargo and Gayle Mickey of WomenVenture. The panel was moderated by Andy Amoroso of the Small Business Administration (SBA).

The SOHO (Small Office-Home Office) Loan program is a unique loan model which is currently “the only loan program in the country which targets this audience,” according to Sue. She also tells us that although the loan is new, over 600 have been done nationwide so it is catching on quickly. The SOHO Loan program is a co-sponsored project between the SBA and the National Community Reinvestment Coalition. It is designed to assist the exploding number of
small and home-based businesses to obtain SBA guaranteed loans. It is also intended to overcome the historic reluctance of conventional loan providers to work with low return-rate financing as the loan amount is from $5,000 - $15,000. Among the many amazing aspects of the loan program is that the process takes from start to finish, as long as the application is complete, 20 days to fund. It is a one-page application with NO business or personal tax returns and NO collateral required.

We expect to hear from Sue Malone often as we track the progress of the SOHO Loan Program and as additional similar programs for the small-based business community are developed.

Small Office-Home Office Loan — Sue Malone

SOHO $5,000 loans as part of the SBA’s Community Express loan program

The Innovative Bank, Community Express SOHO loan program is one of a kind. It is designed to work in the small business home office niche with the largest amount to be borrowed of $15,000. The average size loan is $5,000 with only minimal paperwork that needs to be completed and two of the pages are for signatures only. No tax returns or business plans are needed. It is truly a simple loan with processing taking usually 15-20 days once the application is completed.

Community Express loans are designed to help minority business owners defined by the SBA as:

• Women or Veteran-Owned businesses
• Business owned by these recognized minorities: African American, Puerto Rican, Native American, Hispanic, Asian, Pacific Islander, Eskimo or Aleut or Multi-Ethnic
  

(Majority ownership must fall into one of the SBA recognized ethnicities)

• Businesses located in one of the specially designated “LTMI”...low to moderate-income urban or rural areas
  

Businesses not eligible for these loans will include:

• Any business earning 30% or more of its revenue from gaming
• Non-profit Enterprises
• Multi level marketing (i. e. Mary Kay, Herbal Life, etc.)
• Speculative Real Estate
• Adult-oriented businesses (includes web sites, bookstores, clubs)
  

The loan is a 7-year term loan, no prepayment penalty with a monthly principal and interest payment of $82 per month. Prime + 4.99% loan and packaging fees of $475.00. Technical assistance is a requirement with this loan.

Loan proceeds may be used for most business purposes such as:

Credit scoring is done on a credit matrix basis, which includes a credit report, industry code, average monthly sales, length of time in business and total liquid assets, which cannot be more than $100,000.

Applicant will be denied if they have a default on their student loan, owe back payroll taxes, or are delinquent on their child support payments.

Loan forms can be downloaded at innovativebank.com under “SOHO Loan Program.” Sue Malone can be reached at 415-285-1424 or . Ron and Gregg at Sue’s office can also answer any questions.