More than 10,000 small business entrepreneurs have expanded, profited and created new jobs with a financing boost from CDC Small Business Finance.
Celebrating 37 years in business this month, the non-profit CDC announced that small businesses throughout California, Arizona and Nevada had benefitted from $12.9 billion in SBA loans and other capital. CDC released its Making A Difference Report that contained the following other measurements of CDC’s impact on small businesses and the communities it serves:
- $12.9 billion provided via SBA-504 loans, which small business owners used to buy their own commercial/industrial building and large equipment.
- $150 million provided via SBA-7a (Community Advantage) loans and other general business financing.
- 167,0000 jobs created and preserved
- 34% of all loans went to women, minorities and military veteran entrepreneurs
- $3.6 million in contributions to community organizations
- $145,000 given in scholarships to women and minority college students transitioning from a community college to a 4-year university.
Come March 8 – International Women’s Day – female entrepreneurs will take a well-earned bow for achievements they’ve made in business. A few factoids* provide some perspective:
- More than 9 million firms in the U.S. are owned by women, employing nearly 8 million people, and generating $1.4 trillion in sales as of 2014.
- Women-owned businesses account for 30% of all privately held firms and contribute 14% of employment. These companies employ 1.4 million people and generate $226 billion in revenues annually.
- 2.9 million firms are majority-owned by women of color in the U.S.
* Factoids courtesy of National Association of Women Business Owners
CDC Small Business Finance has approved $1.5 billion in total financing for women-owned companies, including $61 million in 2014 that women entrepreneurs used to buy their own commercial/industrial building.
With the Federal Reserve signaling a long-anticipated interest rate increase in 2015, small business owners would be wise to take advantage of existing low rates in Small Business Administration (SBA) loan programs.
The 20-year fixed rate for an SBA-504 loan, which allows small business owners to buy or construct their own building or purchase large equipment, has averaged 4.8 percent for the last six months. You can download information on how interest rates relate to small business growth – click HERE.
“For small business entrepreneurs who’ve been thinking about expanding, now is the time to invest in their companies before the interest rate start to climb,” said Kurt Chilcott, president of CDC Small Business Finance, a nonprofit that leads the nation in SBA-504 loans.
Banks and other lending experts have speculated that the federal government could start to bump up interest rates as early as this summer.
SBA-504 financing appeals to small business owners who are weary of paying rent and want to build equity for themselves. The program allows entrepreneurs to access low-fixed-rate, 20-year financing upwards of $20 million with a minimal down-payment (10%).
“The SBA-504 loan is a great tool to help new small businesses grow, but it’s often not mentioned by financial advisors,“ said Chilcott.
The most significant advantages of SBA 504 loans include:
• Preserving cash to meet working capital needs
• Tax savings
• No additional collateral required
• No balloon payments
To qualify for an SBA 504 loan, businesses must be:
• For profit
• Organized as a sole proprietorship, corporation, partnership or LLC
• Have a business net-worth below $15 million and a net-profit after taxes below $5 million within the last two operating years