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When Cash is Hard to Find, a Community Advantage Loan May Be Good Fit

October 24, 2014 | Commercial Real Estate Loans

So you want to start your own business and need cash. What do you do?

Many small businesses are getting lured by alternative lenders who charge exorbitant interest rates. But there’s another, more viable option that carries a government guarantee with it. It’s called the Community Advantage loan from the Small Business Administration (SBA).

“Banks tend to be risk-averse, particularly with new small businesses that want to borrow less than $250,000,” said Stacey Sanchez, senior loan officer with CDC Small Business Finance, the national leader in Community Advantage lending. “But banks also want to be helpful and that’s when many of them will refer their clients to the Community Advantage program.”

Many small businesses struggle to find capital and are thwarted in their attempts for various reasons, including low credit scores, limited industry experience, tight cash flow or being highly leveraged.

The Community Advantage program provides small business owners with $20,000 to $250,000 for working capital, equipment, business acquisitions, start-ups and tenant improvements. At the current time, rates can be as low 6%.

One small business that fit the Community Advantage model is Georgia’s restaurant in Orange County, which recently secured an $82,000 Community Advantage loan to help launch a new eatery in The Anaheim Packing House. The restaurant specializes in Souther-style, creole-inspired comfort food in a fast-casual dining atmosphere.

“We needed capital for inventory and cash flow and the Community Advantage loan provided the springboard to a successful launch of our restaurant,” said Marlon Machado, co-owner of Georgia’s.

Small business owners can find out if they prequalify for a loan by calling 800.611.5170 or by using CDC Small Business Finance’s Prequalify Today tool. You can also find and follow us on Twitter (@CDC_Loans) and LinkedIn.

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