Commercial Lending
Commercial Lending FAQ
Q: Where and to whom does Self-Help provide financing?
A: We provide financing to for-profit businesses and nonprofit organizations located in the state of North Carolina. Anyone is eligible for a loan as long as they use the money for legitimate and legal business purposes.
Q: How do I get started? What is the process?
A: You can download a Small Business Loan Application directly from this website or call 1-800-476-7428 and ask for Commercial Lending to have one mailed to you. We will determine if you need an SBA guarantee to receive a loan. After completing the application, one of our local loan officers will review the application and get in touch with you with any questions. Your application will then be submitted for loan approval. If your loan is approved, you will be asked to meet certain conditions and execute all necessary closing documents (e.g. Recorded Deed of Trust if you are using your home as collateral). Once all the documents are in place, your loan will close and you will receive the money. Please see the Applying for a Loan page for further details.
Q: What information do I need to send?
A: Different information is required depending on the loan size and purpose of the loan. In general, we will need financial information on your business, personal financial information, the last two years of business and personal tax returns, projections on future income and expenses for the business, and resumes of key management. Download an application to see specifically what you will need to send.
Q: Who should I talk to if I have questions?
A: If you have further questions after reviewing this website, please call 1-800-476-7428 and ask for a commercial lending specialist.
Q: Does Self-Help have limits on what it will finance (start-ups, acquisitions, certain industries, etc.)?
A: We finance almost any type of business activity, including start-ups and acquisitions. The only activities we do not finance are financing activities and speculative operations.
Q: Does Self-Help do 100% financing?
A: We do not have a policy against 100% financing, but we do require owner investment, or equity. Generally somewhere between ten and 40 percent of the business assets should be paid for by owner investment.
Q: Do I need a business plan? How do I put one together?
A: We require a basic business plan for all new organizations (less than one year old) who want a loan greater than $3,000. There are free on-line resources to help you in writing a business plan (www.businessplans.org). See Small Business Assistance Links for a list of sites to help you write a business plan. Other borrowers may be required to submit a full or partial business plan to explain key factors of their business.
Q: What will Self-Help use as collateral?
A: We will generally want to secure the loan by placing a lien on business or personal assets. The collateral required depends on the size of the loan and strength of other factors. Collateral could include a house, real estate, cash, and/or business equipment, accounts and inventory. We will seek sufficient collateral to secure the loan, but can consider applications for loans that are not fully secured.
Q: How do guarantees for nonprofits work?
A: If the nonprofit is not strong enough to qualify for a loan on its own, we often ask for a personal guaranty from someone involved in the management of the organization (e.g. board member or executive director). If the nonprofit was unable to pay back the loan, we would then look to the individual guarantor to pay back the loan.
Q: How good does my credit have to be?
A: You do not need "perfect credit" to qualify for a loan from Self-Help. Credit history is just one of the factors analyzed in making a loan decision. If you have a weak credit history, that can be made up for with other possible strengths. However, you should be up-to-date on all of your bills and we do not lend to people who are currently in bankruptcy or have a substantial number of collection accounts or judgements.
Q: What is Self-Help's interest rate? Are there additional costs?
A: In general, Self-Help uses market rates of interest and bases the rate on the risk of the loan. Some rates are fixed and some float with the prime rate. The rate for microloans ($35,000 and under) is 8.5%. Larger loans start at prime plus 1%. Self-Help does offer lower interest rate loans for specific programs such as our CCRLF loan product for child care providers and our Community Based Supportive Housing Loan. There is no application fee. Additional costs will include closing costs. Closing costs vary, but are generally low.
Microloans (typically loans less than $35,000) have a $150 closing fee. Larger loans have fees based on a percentage, usually between 1% and 2% of the loan amount. These can be deducted from the amount of the loan. Some loans will also have appraisal and attorney fees that are also paid by the borrower. A loan officer can give the borrower a more complete summary of potential expenses at an early stage of the loan application process.
Q: How long will it take to receive a loan?
A: This depends on the size and complexity of the loan and can range from as quickly as one week to several months. Please see the Applying for a Loan page for further details.
Q: How can I get my credit report?
A: There are three primary consumer credit reporting agencies. When making a loan decision, we will pull your credit report from one of these agencies. We recommend that you periodically get a copy of your credit report to assure its accuracy. You can order your credit report from any of the three agencies by phone or on-line:
Equifax: 1-800-997-2493; www.equifax.com
Experian: 1-888-397-3742; www.experian.com
Trans-Union: 1-800-888-4213; www.transunion.com
SBA 504
Q: Is Self-Help part of the SBA? How do the guarantees work?
A: No, we are not part of the SBA. We are an independent, nonprofit financial institution. However, we do participate in various SBA programs including SBA Microloans, SBA-guaranteed loans, and SBA 504 loans. Please see Business Loan Products for additional details.
The SBA guarantees 75 to 80 percent of the principal amount of our SBA-guaranteed loans, thus reducing some of our risk. These guarantees allow us to make loans to businesses that might not have enough collateral or that are just getting started. These loans do not have below-market interest rates; in fact, their interest rates tend to be higher than conventional loans, because the loans are usually riskier. You do NOT need to apply specifically for an SBA loan. All you need to do is fill out our Small Business Loan Application and we will determine if you need an SBA guarantee to receive a loan.
Q: Who is the primary contact for questions about my SBA 504 loan?
A: Self-Help is your primary contact when you have questions about your SBA 504 loan. We are the servicing agent for your loan. We monitor your business, answer your questions, and communicate with the SBA regarding actions needed on your loan. Self-Help should always be your first contact for information on your SBA 504 loan.
SELF-HELP SBA
504 Servicing Department
301 W. Main St.
P.O. Box 3619
Durham, NC 27702
Phone: (919) 956 - 4400
FAX: (919) 956 - 4608
Your 504 Servicing Specialist at Self-Help is Paul Frolik.
Email: paul.frolik@self-help.org
Q: What should I do if I want to pay off my 504 loan?
A: We recommend that you contact Self-Help (link to top) immediately if you are thinking about paying off your loan early. That way we can give you some advice on how and when it makes sense to do so, and discuss with you whether or not you have better options.
Please remember that part of the trade-off with long-term, fixed-rate 504 financing is that there can be a fairly hefty prepayment penalty (referred to as a “premium”) on your loan. We must charge this penalty because we have to pay off the investors who provided your financing; they expect a guaranteed return for the lifetime of your loan, and we can’t provide the cash flow without collecting the penalty.
The first thing you should do is look back at the material we gave you when your loan closed and find the prepayment premium schedule. That will tell you roughly what your prepayment penalty will be.
Q: Could I possibly get a second 504 loan?
A: To find out if you are eligible for more financing through the SBA 504 program or other SBA programs, simply contact our 504 Servicing Department (link to top). We will talk with you about your current loan balance and about the new project you want to pursue. We can then give you some idea of how you can access more financing.
The amount of additional SBA financing you can obtain will depend on details of your new project and on the remaining SBA loan eligibility you have. Every small business owner who meets SBA eligibility guidelines can qualify for up to $1 million in total SBA financing at any one time. In some cases, small business owners can qualify for up to $1.3 million. Eligibility up to the $1.3 million point is for businesses that meet the SBA’s public policy goals, which include being minority-owned, woman-owned, veteran-owned, or rurally located. To determine if your business qualifies for the higher limit, please call Self-Help.
Current Customer/Existing Borrower
1. What items do I need to give Self-Help on a regular basis?
2. What can I do to stay in good standing?
3. What if I am going to be late with a payment?
4. How can I get my year-end statement?
5. How can I find out the balance of my loan?
6. What do I do if I want to refinance my bank loan?
7. What if I want to refinance my home & Self-Help has a lien?
8. Who do I call for Automatic Clearing House?
9. What happens if you don’t pay your taxes?
Q: As a commercial loan borrower, what items do I need to give Self-Help on a regular basis?
A: Items that you need to provide to Self-Help on a regular basis are:
- Annual financial statements on your business. Tax returns are usually the best items for you to give us, but we can accept accountant’s statements as well. To submit your documents to Self-Help link to top to view the listed contact address.
- Updated information on your hazard insurance if you decide to change insurance agents. We need to make sure that your new insurance has the coverage we need for our loan.
- Job creation statistics. At the end of the second year of your loan, we will ask you some questions about the number of employees you have at your business. This is to see how many new jobs you have created.
- Tax payment confirmations. We occasionally may need verification that all your property tax payments are current and in order. Self-Help will contact you to request this information if we need it.
- Cooperation with our site visits, especially in the early years of your loan. After the first few years, our site visits will occur less frequently, but we will still check in from time to time.
- Prompt and early notification of any changes you want to make in your business that could affect your SBA 504 loan. The earlier you tell Self-Help about a change you want to make, the smoother the process will work for you.
Q: What can I do to stay in good standing?
A: To remain in good standing, you need to:
- Maintain insurance on property
- Maintain timely payments
- Maintain current payments on taxes, income taxes, payroll taxes, property taxes. Call us if this becomes a problem. We may be able to lower your payment temporarily so that you can meet your obligations
- Keep excellent financial records and be able to your financial available to your loan officer
Q: What if I am going to be late with a payment?
A: Contact a Self-Help loan officer.
Q: How can I get my year-end statement?
A: Colson Services Corporation sends you annual information on the amount of interest paid on your loan. Self-Help also receives copies of these forms, and can verify the information. Typically, you will receive this information in early February. We will receive these forms around the same time, and can go over the information with you as needed. If you need additional copies, please contact our servicing department and we’ll be happy to forward you additional copies.
Q: How can I find out the balance of my loan?
A: The amortization schedule given to you when your loan was funded shows how much of your loan’s principal, interest, and fees are paid off with each payment on your loan. As long as your loan is current, this schedule will reflect the exact balance of your loan at all times. You can always call Self-Help (link to top) for more details on your loan. We can check your files, and get back to you with information within an hour or two.
Q: What do I do if I want to refinance my bank loan?
A: If this situation arises, please call Self-Help right away to discuss.
There are typically two occasions that will prompt you to think about refinancing:
- Interest rates drop, and you can get a better deal, or
- You wish to switch to a new bank.
We generally cannot allow you to add more money to your loan balance when you refinance, unless you are making an addition to your building. Most refinancing can cover only a straight replacement of the existing loan with a new loan of the same outstanding balance.
In general, as long as the new financing is equal to or better than the financing you already have in place, we will allow you to take on a new loan senior to us. Please call Self-Help if you start thinking about refinancing, so we can assist you on a timely basis.
Q: What if I want to refinance my home & Self-Help has a lien?
A: Call a Self-Help Credit Union loan officer. We will require a formal, legal closing so your attorney can prepare the documents we need to maintain collateral position.
We rarely allow borrowers to “cash-out” the equity in their house.
Q: Who do I call for Automatic Clearing House (Automatic Payment) account changes?
A: Self-Help servicing at 1-800-476-7428- (Christine Clark – x 4488)
Q: What if I don’t want to be on ACH?
A: It is a requirement of your loan
Q: What happens if you don’t pay your taxes?
A: You will be subject to tax foreclosure.
NOTE:
As a current customer of Self-Help, you should have received our most current “504 Loan Payment Guide for Borrowers.” If you have misplaced your copy or need additional copy, please contact us and we will be glad to forward another copy to you.
