Lonnie A. Saboor is senior manager of small business finance for Invest Atlanta. He wrote this informative article about small business financing available in the Atlanta area. I offer this an example of the funding available in many metro areas. As a veteran entrepreneur, you need to seek out and investigate any possible funding source. Look in your local area fro similar sources of funding.
Lonnie A. Saboor writes - Are you having problems accessing conventional bank financing to start or expand your business? Have you been seeking a voice in the financial wilderness that can make your small-business dreams become reality? Then, maybe it’s time for you to learn more about Invest Atlanta.
It is the oldest municipality-sponsored organization in the metropolitan Atlanta area for small businesses.
Since 1981 Invest Atlanta and its predecessor organization (Atlanta Economic Development Corp.) has been in the forefront of financing small businesses in Atlanta. Invest Atlanta’s programs, which are funded by the city of Atlanta, have provided low-interest loans to hundreds of small businesses.
Loans have been made to retail, service, wholesale and manufacturing companies. Several loans have been made to home-based businesses that needed to expand into a commercial area in the city of Atlanta.
Invest Atlanta’s Small Business Financing Programs include the following:
- Business Improvement Loan Fund — Fixed asset and working capital program aimed at targeted business districts in the city of Atlanta. Funding up to $50,000 at below market interest rates is available for business owners and commercial property owners (no working capital component for non- business owners).
- Phoenix Loan Fund - Fixed asset and working capital program available citywide. Funding at below market interest rates, not to exceed one-third of total project or $100,000, whichever is less.
- Opportunity Loan Fund - Fixed asset and working capital “gap” financing up to $100,000 for projects of $200,000 or more is available at below market interest rates.
- Empowerment Zone Fund - Fixed asset program for businesses located in the commercial Empowerment Zone area. Funding between $25,000 and $50,000 is available for both business owners and commercial property owners.
- Atlanta Catalyst Fund - Fixed asset and working capital program available primarily to qualified businesses in the New Markets Tax Credits eligible low-income census tracts. Funding between $50,000 and $100,000 is available at below market interest rates.
- Atlanta Seed Equity Fund - Equity Fund created by Atlanta Emerging Markets Inc. (wholly-owned by Invest Atlanta) to help support startup businesses with growth potential in the city of Atlanta. Working in partnership with Startup Atlanta. Provides between $25,000 and $100,000 in equity funds.
- Global Credit Express Lending Program - Invest Atlanta as a city/state partner with the Export-Import Bank (EX-IM BANK) is assisting businesses interested in obtaining working capital for exporting products abroad. A 12-month line of credit up to $500,000 is made available through EX-IM BANK and processed by Invest Atlanta.
- Invest Atlanta NOW - Invest Atlanta has partnered with NOW Account to provide small businesses with business account receivables an opportunity to turn around 90 percent of their 30-, 60- or even 90-day terms or more within five days of being approved for less than the cost of accepting a credit card for payment.
All startup businesses are required to inject 20 percent equity and obtain a bank decline letter in order to qualify for Invest Atlanta’s direct loan programs. Invest Atlanta’s programs are aimed at assisting small businesses that cannot arrange all or a portion of the funds they need from conventional banks. A good example of this was the three entrepreneurs who wanted to open a Subway franchise, but because they lacked restaurant experience could not arrange bank financing. Invest Atlanta was able to leverage the group’s equity injection with a $50,000 low-interest Business Improvement Loan Fund loan. This Subway is now among the top 10 percent of revenue-generating Subway franchises in the Atlanta area.
Invest Atlanta has programs that can assist small businesses that need as little as $10,000 like a fitness club in the East Atlanta business corridor or $3.8 million, such as an engineering firm located in the Fairlie-Poplar area of downtown Atlanta. By leveraging bank financing, an SBA 504 Debenture, equity funds and a $100,000 Opportunity Loan Fund loan from Invest Atlanta the $3.8 million project for land and building acquisition was completed.
Commercial property owners interested in renovating commercial property strips in underdeveloped areas of the city may be able to utilize the special Business Improvement Loan Fund. A few years ago Invest Atlanta participated in a mixed-use development project in the Westview neighborhood area. The project received $1 million in state tax credits for housing apartment development and Invest Atlanta provided 10 commercial spaces with a loan of $20,000 each for a total of $200,000 at an interest rate of 2 percent. The development is currently 100 percent occupied.
Interested business owners can get more information regarding the Invest Atlanta small-business programs by visiting our website at www.investatlanta.com and attending our monthly information workshop session on the last Wednesday of every month.