Local banks, programs help fund new venture
One of the most frequently asked question we receive as small-business counselors is, "I've been unable to get the money I need from the bank, so where can I get the money necessary to start or expand my business?"
The first answer to that question is your relatives, grandmother, friends, etc. The next is your local banker. He or she is there to help all of us when we need money for whatever the occasion.
Other frequently overlooked sources that are available in Rockford are the various funding systems that the city of Rockford, Winnebago County and the state offer to for-profit businesses.
So where would you look?
For any and all of these programs, contact Ron Moore, economic development specialist at the Community Development Department, Rockford City Hall, 425 East State St, Rockford, Illinois for an application or information. Most of these programs are employment-driven and max out at $50,000 based on total project or $150,000 or more.
- The city provides the Microenterprise Investment Match loan. A microenterprise is a business with five or more employees, and one of more is also te owner: Many of these companies are owned by low and moderate-income people.
They often are at a competitive disadvantage because they are typically undercapitalized and face continuous cash-flow problems. Businesses of this size play an important role in the economy of the urban areas, supplying the jobs, goods and services needed.
The city may provide up to twice the amount of the equity investment or $10,000, whichever is less. To be eligible, the household income of the business owner must not exceed 80 percent of Rockford's median income. Funds are available to start-up businesses - those whose business is less than 2 years old and meet the above criteria. The business owner also must be a graduate of Rock Valley College's Self Employment Training program or have equivalent training.
The loan will be forgiven at the rate of 20 percent a year if the business life extends beyond five years and is within the city limits of Rockford.
- The Small Business Loan program provides low-interest, fixed-rate gap financing to for-profit businesses. The program may fund up to 39 percent of the total loan needed, in partnership with a private financing institution or private source.
Loans through this program may not exceed $50,000, or 39 percent. One full-time job must be created for each $10,000 loaned. The goal of the loans is to create and retain jobs in Rockford, supplement loans made by others, and encourage and assist in revitalizing neighborhoods. The loans may be used for equipment purchases, construction, site development and working capital.
- The Community Services Block Grant links federal, state and private financing with low-interest rates. The business must be within Boone or Winnebago counties, and the loan period is not to exceed 10 years.
It provides up to $15,000 for each job created and may be used for working capital, equipment or real-property improvements. In most cases, these loans are supplemental to other financing and subject to job creation for the low-income individual.
- The Illinois Ventures for Community Action, sponsored by community-action agencies, has similar programs, objectives and requirements.
If you need help in completing the application, you can get that at SCORE, call 962-0122.
Bill Bryan is a counselor with the Service Corps of Retired Executives. SCORE offers counseling, workshops and seminars on small business operations. You can reach Bryan through SCORE, 515 N Court St. 815-962-0122, for information and appointments.
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