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  • Writer's pictureTravis Healy

Why You Should Contact Your Certified Development Company Before Contacting Your Lender

Starting or expanding a business often requires financial assistance. Whether you need funds for purchasing equipment, renovating a space, or launching a new venture, securing a loan is a common step. When seeking financing, many entrepreneurs instinctively turn to traditional lenders like banks or credit unions. While these institutions can certainly be valuable partners, there is another resource that should not be overlooked: Certified Development Companies (CDCs).

CDCs are nonprofit organizations certified by the U.S. Small Business Administration (SBA) to provide financing and support to small businesses. They specialize in administering the SBA's 504 loan program, which offers long-term, fixed-rate loans for real estate and equipment purchases. Here are several reasons why you should consider contacting a CDC before reaching out to your lender:

  1. Expertise in SBA Programs: CDCs have extensive knowledge and experience in working with SBA loan programs. They understand the intricacies of the 504 loan program and can guide you through the application process, ensuring that you meet the necessary criteria and paperwork requirements. They will work closely with you to help structure a loan that suits your specific needs.

  2. Access to Favorable Terms: The 504 loan program administered by CDCs often provides more favorable terms compared to traditional loans. These loans typically have lower down payments and longer repayment periods, which can greatly benefit small businesses with limited resources. By working with a CDC, you may be able to secure financing that better aligns with your business goals and cash flow.

  3. Financial Counseling and Support: CDCs offer more than just financing. They provide valuable financial counseling and support to help you make informed decisions about your business. They can assist with financial planning, budgeting, and evaluating your business's overall financial health. This personalized guidance can be instrumental in helping you succeed and avoid common pitfalls.

  4. Local Connections and Community Focus: CDCs are deeply rooted in their local communities. They understand the unique challenges and opportunities that small businesses face in their specific regions. By partnering with a CDC, you gain access to their extensive network of local contacts, including lenders, real estate professionals, and other business owners. This can open doors to valuable resources, partnerships, and growth opportunities that you may not have otherwise discovered.

  5. Streamlined Application Process: Navigating the loan application process can be complex and time-consuming. CDCs are well-versed in the SBA's loan application requirements and can help streamline the process for you. They will guide you through each step, assist with compiling the necessary documentation, and ensure that your application is complete and accurate. This expertise can save you valuable time and increase your chances of securing financing.

  6. Complementary Financing Options: In addition to the 504 loan program, CDCs often have access to other financing options or partnerships. They can help you explore alternative sources of capital, such as microloans, grants, or private investment opportunities. By working with a CDC, you may discover additional avenues for funding that can supplement or complement your primary loan.

While banks and traditional lenders certainly play a crucial role in business financing, contacting a CDC before reaching out to your lender can provide unique benefits and opportunities. Their specialized knowledge, access to favorable terms, financial counseling, local connections, and streamlined application process can significantly enhance your chances of obtaining the right financing for your business.

It is important to remember that each business has unique needs and circumstances, and the choice between a CDC and a traditional lender may vary depending on your specific situation. However, exploring the services and resources offered by CDCs is a prudent step for any small business owner in need of financial assistance. Contacting Wasatch Business Finance early in your financing journey can help set your business on the path to success.

Contact Wasatch Business Finance for a free consultation: / 385-799-6700

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