Starting or growing a business takes money, and getting a loan can be challenging for an entrepreneur. Most banks want a proven track record and won't loan to start-ups or those with less than a two-year financial history.
That's why the EDC created the following financing options for businesses that don't qualify for conventional loan financing.
SBA loans are federally guaranteed and geared towards small businesses and entrepreneurs. Typically, lenders require a completed business plan with financial projections, 20-30% equity or collateral, and evidence of the applicant’s ability to repay the loan.
The EDC has partnered with the Economic Development & Financing Corporation (EDFC) of Mendocino to provide creative funding solutions for new or existing businesses with a regional Revolving Loan Fund. 1 million dollars is currently available in funds for Sonoma County small businesses with loans starting at $50,000 up to $250,000. Fixed interest rates start at 6% APR and terms range from 3-15 years.
For more information and assistance with the Revolving Loan Fund, contact Robert Gernert with EDFC at robert@edfc.orgor (707) 234-5705.
EDFC provides a critical link between the public and private sectors acting not just as a lender but also as an economic development organization. We work with a multitude of partners to develop plans and implement projects that support economic growth.
These alternative lending resources can help businesses that encounter difficulty gaining financing through traditional means. These lenders can finance start-ups and existing businesses, and some offer pre- and post-loan business counseling.
California Pollution Control Financing Authority: A program that incentivizes participating financial institutions to address the growing and ongoing financing needs of California’s small business borrowers by providing a safety net of matching contributions to loan loss reserve accounts for participating financial institutions.
Micro-lender that specializes in startups and existing businesses.Loans range from $5,000 to $100,000 with fixed interest rates from 9% to 11% and 3-5 year terms
Angel venture capital investors provide funding to companies engaged in groundbreaking practices including, but not limited to the areas of; Agriculture, alternative energy, biotech, clean tech, communications, industry, high tech, and manufacturing.
Recycling Market Development Zone (RMDZ) California Integrated Waste Management Board This program combines recycling with economic development to fuel new businesses, expand existing ones, create jobs, and divert waste from landfills. calrecycle.ca.gov/rmdz
Sonoma County Energy Independence Program (SCEIP) This program offers PACE financing for permanent energy, water, wildfire safety, and seismic strengthening improvements through the property tax system. Financial is available for residential, commercial, industrial, agricultural, multifamily and certain non-profit projects. (707) 565-6470 ScEIP@sonoma-county.org sonomacountyenergy.my.site.com/financing/s
Crowdfunding connects entrepreneurs with investors and/or donors who pool their resources to fully fund a project or venture. Each of the sites listed below differdiffers in their offerings and requirements, so be sure to investigate each thoroughly.
Industrial Development Bonds (IDBs) are tax-exempt securities issued by cities, counties, and joint powers authorities (JPAs), such as CEDA, to provide small- to medium-sized manufacturers money for land purchases, building construction, facility expansion, new production equipment acquisition, and solar and energy conservation retrofits. Benefits of IDB financing include below-market interest rates, long-term financing, and it is available statewide without limitations to specific areas or communities. Overall, IDB financing reduces total financing costs so more capital can be invested back into the organization’s operations.
501(c)(3) revenue bond financing facilitates land and building acquisition, building construction, and refinancing of prior debt (for eligible capital projects). Benefits of this type of financing include below-market interest rates, long-term financing, and it is available statewide without limitations to specific areas or communities. A 501(c)(3) revenue bond is preferred over a conventional loan because the interest is tax-exempt and therefore the interest rate is significantly lower than bank financing. Over a long period of time, this can mean substantial savings to the borrower, depending on the amount financed, and reduces total financing costs so more capital can be invested back into the organization’s operations.
TheHumane Society of Sonoma Countyrecently used these bonds to expand their facilities and open the new Healdsburg Center for Animals in 2016.
CEDA was established as a Joint Powers Authority (JPA) by theCalifornia Association for Local Economic Development (CALED)to address gaps in economic development financing. Specifically, CEDA’s goal is to issue bonds for small to medium-sized California manufacturers or nonprofits looking to grow or expand, and in some cases refinance
Questions? ¿Preguntas?
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