Reminder about LEDC's small business lending program
Small Business Lending Program through the Latino Economic Development Center (LEDC)
As a certified Community Development Financial Institution (CDFI), LEDC provides microloans to start-up and existing businesses that have difficulty obtaining credit from mainstream financial institutions. LEDC is committed to helping business owners improve their consumer credit score, and assess the financial tools they need to grow and expand their business.
What documents are needed to apply for a loan?*
1) LEDC intake form
2) Credit report (pulled in house)
3) Personal and business bank statements (most recent 3 months)
4) Personal and business tax returns (last two years)
5) Business Income Statement
6) Personal and business balance sheet
7) Collateral
8) Lease, if applicable
9) References
10) Articles of Incorporation
*Additional documentation may be required depending on the size and purpose of the loan.
Are there any fees? Yes. There is one fee that is 3% of the loan amount for closed loans. For example, a $6,000 loan would have a fee of $180, which would be paid at the time of closing. There is also a $50 application fee that includes one credit report.
What are the terms and interest rate of LEDC’s loans? LEDC offers fully amortized, fixed installment loans. Interest rates range between 9-14 percent, based on your credit score. Terms vary between 6 months – 5 years, depending on the business owner’s capacity to repay the loan.
What is the average size of an LEDC loan? LEDC offers loans of up to $50,000, with our average size loan around $15,000. For LEDC clients in good standing that would like to apply for second loan with LEDC, $50,000 is the maximum amount a client may have outstanding at a given time.
How long will the application process take? Once the loan officer has all the required documents, loans up to $20,000 are typically approved or denied in approximately two weeks. Loans over $20,000 require the approval of a loan committee, and therefore take closer to 3-4 weeks to process.
What factors does LEDC look at to determine whether or not a loan is approved? As a non-profit loan fund, LEDC takes a holistic and comprehensive approach to evaluating potential loan clients. LEDC looks at many factors, such as strength of the business model, number of years of experience, collateral, owner equity contribution, payment capacity, credit score, and references.
Are there any types of businesses that cannot apply for a loan? Yes. Any business engaged in illegal activities or the sale of sexual-oriented goods or services, liquor stores, real estate and speculative investments are ineligible for LEDC loans. Contact an LEDC loan officer for more information.
Are there any negative credit factors that make an applicant ineligible? Yes. If an applicant owes back taxes to the state or the IRS, has not paid any court judgments or outstanding child support, or has declared bankruptcy in the last year, he or she will not qualify for a loan. Contact an LEDC loan officer for more information.
For what purposes can LEDC loans be used? LEDC loans are fixed, installment loans that can be used for working capital, equipment, inventory, advertising and marketing, etc.
Is there a minimum credit score necessary to apply for a micro-loan? No. LEDC does not have a minimum credit score requirement. However, the content of the credit report is very important. The applicant must be on-time with their monthly debt payments and have no current collections or public records.
LEDC Contact Information:
Website:
www.ledcmetro.org
DC Office: 2316 18th Street NW Washington, DC 20009
Small Business Lending Officer:
Christina Stockamore
Phone: 202-540-7421
cstockamore@ledcmetro.org
