FAQ

Before applying for a loan, you should ask yourself (and be able to positively answer) the following questions:

• Can you describe, in detail, your business and its value to your clients? Do you have specific goals for the next one, two, and three years? Do you have a business plan that describes these?
• Do you know why you need a loan? How, specifically, are you going to use loan money to help your business grow?
• Do you keep track of your business and personal finances? Do you have historical financial statements and projected financial statements?
• What collateral do you have? How much would it be worth if you had to sell it? How does this compare to the size of loan you are requesting?

Business Coaches are happy to help you assess your loan readiness, and help you prepare your application.

Visit our Loan Readiness page for assistance.

Note that you will not be able to save your application before submitting, so you are strongly encouraged to visit the Loan Readiness and About Our Loans pages before beginning the process, or working with a free business counselor in a one-on-one consultation to ensure your application is complete and strong before applying. You can schedule an appointment with a business coach here.

If you have any additional questions about applying for a loan, please call 206-324-4330.

Although Business Impact NW does not have the same stringent policies as most commercial lenders, we do consider how loan applicants have handled their personal debt obligations as an indication of the way they will handle their business debt obligations. If a client has a strong explanation for past delinquent credit, it should be provided in their application.

Once a complete application has been submitted, a Business Impact NW loan officer will review the materials and pre-qualified applicants will be contacted for additional information. Once the application is complete, the loan officer will begin analyzing and underwriting the application. After the loan is underwritten, it is presented at weekly loan department meeting for approval. If approved, the loan heads to documentation and loan agreement paperwork is drawn up. After a loan is signed and closed, disbursal of funds can begin directly.

Because Business Impact NW does not think like a traditional commercial lending institution, our decision to approve a loan is based on a broad range of considerations including both the financial and the social character of the application. In order to capture the larger picture, Business Impact NW uses the “5 Cs” framework to assess a loan application.

The 5 Cs are:

• Character (whether the applicant successfully repaid credit in the past),
• Capacity (the experience, skills and abilities need to succeed in business),
• Capital (how much money the applicant is putting into the business),
• Collateral (can include a mix of physical, financial collateral, and guarantees) and
• Cash flow (sufficient cash to pay rent, utilities, taxes, wages, suppliers, etc., plus debt and interest, as well as the business owner).

The entire approval process typically takes 4-10 weeks. The speed of the approval process depends largely on how quickly borrowers submit the complete paperwork for their loan application.

Business Impact NW issues loans and lines of credit between $5,000 and $500,000 for small business loans and up to $750,000 for commercial real estate loans for periods between one and seven years. Business Impact NW’s median loan size is $49,000. Loans greater than $100,000 are reviewed by an external loan committee. In cases where a borrower needs more money than our loan limits will allow, Business Impact NW can participate with another lender to provide financing for the amount between what banks and other lenders are willing to lend and what the borrower needs.

As a non-profit lender, Business Impact NW’s sets its interest rates and fees to cover its cost of funds and repayment risk, plus a small margin for operating expenses. Business Impact NW does not compete with commercial loan providers, and generally offers slightly higher interest rates than banks (though significantly better terms than credit cards or online lenders). Fees charged are comparable to other lenders. Our loan officers can provide you with an estimate of fees and interest rate based on your loan request. Borrowers are encouraged to apply with their own financial institution first. If they are not able to provide financing, Business Impact NW may be able to help.

Business Impact NW requires some form of collateral for all of its loans. The type and amount of collateral varies with the nature and size of the loan. Business Impact NW can be flexible about the type of business or personal assets or guarantee, and can consider certain forms of collateral that banks may not accept. Business Impact NW does not require dollar for dollar collateral coverage, but it does expect borrowers to pledge of some assets of tangible value, either business or personal, such as equipment, inventory and accounts receivable, real estate or titled vehicles.

Business Impact NW expects that all loan applicants will have invested their own funds into their business before applying for a loan. There is no requirement regarding where or how this money is invested in the business, but it is generally expected the applicant will have invested a minimum of 10% of the total cost of the project in the business.

At loan closing, all borrowers will be asked to sign documents personally guaranteeing their loan. When a borrower makes a personal guarantee, they become a cosigner on the loan along with their business and may be responsible for the loan even the business has been dissolved.

Businesses eligible to receive Business Impact NW funding can take many different legal forms. The following business types ARE eligible for Business Impact NW loans:

• Sole Proprietorship
• General Partnership
• Limited Liability Partnership (LLP)
• Limited Liability Company (LLC)
• Corporations
• S-Corporation
• Established Nonprofits (pilot program)

However, Business Impact NW does NOT lend to the following types of entities:

• Trusts
• Joint ventures
• Unions
• Government agencies or units
• Religious organizations
• Fraternal organizations
• Guardianships and
• Other forms of special entities

Business Impact NW will NOT offer credit to business entities whose nature is contrary to our mission and to the reasons we provide financial services:

• Any business engaged in illegal practices
• Companion, escort and dating services
• Massage parlors
• Sexual encounter clubs, organizations and websites
• Sexual in nature businesses such as bikini barista stands
• Growth, processing or retailing of cannabis
• Gun shops
• Tanning salons
• Lotteries or raffles
• Pornographic material
• Pyramid schemes, multi-level sales, etc.
• Gambling establishments or casinos
• Pawnshops.
• Check cashing, pay day lending