The BBL “Emerging” Small Business Loan
Baltimore Business Lending (BBL) provides small business loans to for-profit organizations located in Baltimore City. The product is a small business micro-loan specifically focused on small, emerging and start-up businesses.
Loan Amounts. Loans are available in amounts ranging from $10,000 to $50,000.
Interest Rate. Currently, the interest rate is fixed at 9.25%.
Loan Term. Loan terms range from 3-7 years.
Restrictions. Loans cannot be made to businesses in the adult industry, bars and liquor establishments, gas stations, or establishments storing or handling hazardous materials. In addition, borrowers must qualify as a small business under SBA guidelines; in other words, loans will not be made to large commercial operations, real estate investment firms, or nonprofit organizations.
Use of Funds. The loan can be used to purchase inventory, supplies and materials, to purchase or lease furniture, fixtures, machinery and equipment, and as operating capital.
Collateral and Personal Guarantees. No specific dollar amount of collateral is required, however, a UCC Financing Statement will be filed against any business assets. Personal Guarantees are required of all business owners with a 20% or more ownership interest in the business. Cosigners will be accepted to bolster an application. NOTE: The BBL loan program is designed to provide access to credit for those small business owners who do not have sufficient collateral or equity to qualify for traditional loan resources. If an inquiring applicant has sufficient collateral to secure a loan, that applicant will be referred to one of BBL’s originating partners.
Credit Requirements. A reasonable credit record with consistent payments for a period of at least 6 months prior to application is required. Credit records with a pattern of recent late payments, delinquencies, foreclosure, unpaid tax liens, bankruptcy and/or collections may disqualify a potential borrower regardless of credit score.
The following nonrefundable fees and charges will be charged at application:
- A nonrefundable Application Fee of $100 is charged at application.
- A nonrefundable Credit Report Fee of $25 per applicant is charged at application.
The following fees and charges will be charged at loan closing and will be deducted from the loan proceeds:
- A Processing Fee of $250.
- An Origination Fee of 1.5% of the loan amount.
- A Loan Loss Reserve & Administration Fee of 1.5% of the loan amount.
- The cost of Recordation and Wire Transfer Fees, which currently total $75.
Prepayment Penalty. There is no prepayment penalty associated with BBL loans.
Technical Assistance (TA) Requirement. All applicants for BBL loans must complete a Technical Assistance program acceptable to BBL prior to submitting a completed application. Your Originator can direct you to the appropriate program.
Business Plan & Financials. Borrowers must complete a full, written Business Plan. Financials required include a list of startup costs, an itemized detail of the loan request, (with supporting documentation), the most recent Balance Sheet, two years of monthly Cash Flow Projections, and for existing businesses, the last two years’ Profit & Loss Statements. Also required is a personal resume, a completed personal financial report, (which may be completed through the online application), the last three years’ personal and business (if any) tax returns, and the three most recent personal bank account statements. Personal financials are required of all Co-Owners and Co-Signers.
Business Bank Account. Borrowers are required to have or open a business bank account for automatic withdrawal of payments due.
Business Banker Meeting. Prior to the closing of the loan, the Borrower must also participate in a brief education session with a small business representative from a participating bank to learn about traditional financing options and other support available, and to facilitate future growth.
Originators. Applicants must work through a participating Originator. Your Originator will help you through the process.
Learn more from participating Originator, SBRC Baltimore.