How to Apply for a Loan
 

The Loan Application process starts with a phone call to FACC.  Ask to speak with a Loan Officer to discuss your project.

You start by explaining your financial needs.

 

Be prepared to discuss the following things in the initial conversations;

 

  • Is this a new business – Or is it an existing business

  • Who owns the business

  • Where is it located

  • Is a corporation, LLC, sole proprietorship

  • Why do you need a loan – Be prepared to explain how you would use the loan, for example; Explain your product or service

    • Working capital

    • Equipment purchases

    • Be prepared to discuss the details

  • Do you have a business plan

  • Can you provide financial statements (existing business) or projections (for a new business)

  • How many employees do you have

  • Are you creating any new jobs

  • Is the business minority certified

  • Who are your customers

  • Who are your competitors

  • What proof is there that this company's services or products are wanted or needed

 

After these initial conversations, the applicant will complete the FACC Inquiry Form and submit it to FACC via the OTIS database. You will then receive an email invitation to your personal and secure FACC Client Portal.  Thru this portal you will have access to the FACC loan application, other forms, and FACC business management resources.

 

Including in the FACC business management resources is the Native Business Development Center. The NBDC includes short self-directed videos covering a wide range of useful business management guidelines and materials. Check out our intro video for more information.

 

The S4 Financial Projections Excel Spreadsheet is designed to provide those starting a business or already running a business with information that will allow them to make a “go /no-go” decision. It will help a potential entrepreneur project operating profit, develop a projected income statement, balance sheet and cash flow forecast.

 

Loan Conditions
 

Borrowers - Borrowers in the Targeted Markets

 

Location - State of Wisconsin

 

Loan Size - $5,000 to $250,000

 

Use of Proceeds - See eligible loan purposes 

Equity - Borrowers may be required to invest equity in the form of cash or other business assets into the project of at least 5% of the total business capitalization. 

Collateral - Collateral is required for all loans and is typically in the form of a 1st or 2nd lien on the project assets and all other assets owned by the business.  Personal assets outside the business can also be pledged as collateral. Life insurance on the owner and key people is sometimes required.

 

Guarantees - All individuals owning 20% or more of the business must personally guarantee the loan.  Guarantees from third parties are acceptable.

 

No prior defaults - Applicants who have defaulted on previous loans from FACC will not be eligible for additional loans.

 

Business Plan - All applicants must have a business plan acceptable to FACC that properly explains their business and the project being financed.  The depth and detail required in the business plan will vary by applicant and the Loan Officer will be responsible for determining the exact requirements of the business plan.

 

Criteria for Selection of Projects:
The criteria for funding projects and providing a loan will be based on the merit of the proposed project, financial need of the applicant, availability of funds and ability to meet FACC’s program guidelines.  FACC has a limited amount of funds to lend and therefore the staff has to underwrite the loans that create the most impact, both economically and socially.

Criteria for the selection of projects include:

  • Availability of funds

  • Size of the loan request

  • Eligibility of applicants

  • Eligibility of the project

  • Extent to which private funds are leveraged

  • Extent to which jobs are created

  • Extent to which the loan can be collateralized

  • Evidence of ability to repay the loan

  • Completeness of the loan application

  • Ability of the project to meet the deliverables required by the funding sources

  • Other factors as deemed appropriate

Loan Terms
 

FACC will offer flexible loan terms to its applicants.  Specific terms of the loan such as the interest rate, length of the note, length of the amortization period and the collateral requirements will vary from loan to loan.  FACC needs to work with the applicant to accomplish a loan structure that will benefit all parties.  The exact terms of each loan are explained in the written Credit Presentation when submitting a loan for approval.

Note Terms - Note terms up to 6 years are available for SBA Microloans.  All other loans will have a maximum term of 3-6 years.

Interest Rates - Minimum rate of 6% and Maximum rate of 12%.

Amortization - Maximum amortization is 7 years for equipment and working capital needs.  A amortization of 10 years is acceptable if the useful life of the collateral is at least 10 years.  Amortizations longer than 10 years are usually reserved for real estate related projects and when real estate outside the project is pledged as collateral.The objective is to provide the business with a longer term source of capital, balanced with the need to return funds to FACC so that they can be deployed into other projects/loans.

Loan Application Fee - The standard loan application fee is $500.  When using SBA Microloan funds, we ask for a $500 contribution to FACC.  The loan application fee is usually paid up front when the loan application is presented to FACC.  There will be cases when the loan application can be paid at the closing.  Proceeds from the loan can be used to pay the loan application fee.

Closing Expenses - The Borrower is responsible for all out of pocket expenses associated with the loan application and the loan closing.  This includes legal fees, real estate title searches, UCC lien searches, lien recording costs and appraisals.

Late Charges - 5% of the past due payment amount.

Eligible Borrowers
 

FACC will serve the following customer groups:

 

1. Native American – owned businesses located in Wisconsin & UP, both on and off the reservations.

2. Tribal-owned, non-gaming, business enterprises.

3. Other minority-owned enterprises (specific to respective funding source requirements).

4. Individuals and businesses eligible to participate in the SBA Microloan program.

 

Applicants for a loan can be an individual or any type of business ownership structure (Corporation (C or S), Limited Liability Company – LLC) Note: NO “Sole Proprietors”

 

If you have any questions about eligibility, please call FACC and ask to speak with a Loan Officer at 414-604-2044.

Eligible Projects
 

Eligible Loan purposes:

FACC will make loans that have a legal business purpose.  The emphasis is to support businesses in the Target Markets.  Every loan request is different and requires the Loan Officer to make a judgment call as to whether the project and loan request is feasible. The following is a list of the most common projects that will be funded by FACC, but by no means is the list complete.  We are willing to consider any valid business loan request that makes sense and where repayment of the loan is likely.  The most common loan requests are as follows:

  • Starting a new business.

  • Expanding an existing business.

  • Working capital.

  • Purchase of equipment, machinery, furniture and fixtures.

  • Purchase of inventory.

  • Gap lending projects where we participate with a commercial bank on a project and FACC provides the subordinate piece of funding.

  • Down payment on equipment, where a conventional lender funds a larger piece of the project.

  • Improvements to real estate or other real property (except SBA Microloans in which case real estate is a prohibited use of loan funds).

  • Contract financing where FACC provides working capital to bridge the gap between the performing of the contract and the receipt of funds.

  • Other transactions where the mission is to foster the growth of a business in the Target Markets where job creation and retention is the goal.

 

Ineligible loan purposes:

 

  • Loans with a speculative purpose.

  • Loans for purchasing or improving owner-occupied residential real estate.

  • Consumer loans for personal purchases and/or expenses.

  • Loans to political parties or to persons running for public office or delegates to any convention convened for the selection of public office holders.

  • Loans for any illegal or immoral activities.

  • Financial business primarily engaged in the business of lending, such as finance companies.

  • Businesses located in a foreign country.

  • Pyramid sale distribution plans.

  • Businesses deriving its revenues from gambling activities.

  • Businesses engaged in any illegal activity.

  • Private clubs and businesses which limit the number of memberships for reasons other than capacity.

  • Businesses principally engaged in teaching, instructing, counseling or indoctrinating religion or religious beliefs, whether in a religious or secular setting.

  • Businesses with an associate or principal who is incarcerated, on probation, on parole, or has been indicted or convicted for a felony crime, or a crime of moral turpitude.

  • Businesses which are adult orientated.

Non-Discrimination Policy
 

FACC is committed to lending fairness and fair lending practices.  FACC or any employee thereof, shall not discriminate against any credit request on the basis of race, color, religion, national origin, marital status, age, sex, sexual orientation, disability, and familial status.  All loan products of FACC shall be available to all applicants on a consistent and fair basis provided the applicants meet our loan policy requirements.

 

The limiting factor of this policy is mandatory compliance with funding partner’s conditions of sub-fund levels which must be invested into the specified targeted markets per the grant or loan requirements.

AICCW Sponsors
FACC Funding Partners

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