MACED Financing FAQ
1Whom does MACED serve?
We are a nonprofit mission lender serving the 54 Appalachian counties in Kentucky. We offer enterprise development services along with energy efficiency programs. Our purpose in lending is to assist businesses that would not be able to get a loan from a traditional lender. Some of our borrowers are able to get loans elsewhere but choose to borrow from us instead because of our flexibility in payment schedule and business advisory services.
2Does MACED provide grants?
MACED does not offer grants.
3Does MACED offer personal loans?
MACED does not offer personal loans. MACED only provides business loans.
4What factors do you consider when deciding whether or not to make a loan?
We consider the community impact, repayment risk, type of business, experience of the entrepreneur, business idea if a start-up, business history if an existing business, credit score of the owners and purpose of the loan.
5Why is there a $25 application fee?
As part of our underwriting (determining whether to make the loan), we run a credit report on the owners of the business. This is not the only information we base our decision on, but it is part of the whole picture. The credit reporting agency charges us a fee and we must recover that expense by charging it as an application fee.
6What are your interest rates?
Our interest rates range from 5% to 9% depending on the loan purpose, amount and type of business.
7As a nonprofit, why do you charge an interest rate?
We charge an interest rate to help cover our costs, which include business advisory services to clients, salaries, overhead and the interest we must pay on the borrowed money that we re-lend.
8What is the timeframe for approval of smaller (up to $50,000) loans?
Once we get all of the information we need for a microloan application, it will usually take about 10 days to get an answer on an approval or denial. The approval for loans up to $50,000 is quicker than for larger loans.
9What is the timeframe for approval of larger (over $50,000) loans?
Loans larger than $50,000 must be approved by our loan committee. After your project specialist has received your application and all of the necessary information, he or she will create the loan proposal and present it to the committee. The committee generally meets monthly. It can take up to as long as six weeks to get an answer on an approval or denial.
10What do I need to provide to apply for a loan?
The information we need varies depending on the size of the loan and the length of time the business has existed. At a minimum, we need the completed, signed loan application and the application fee of $25. For start-up businesses, we often need a business plan. If you do not have a business plan, you can contact your project specialist for resources to help you create one. For existing businesses we often need financials and personal income tax statements for the last three years. Feel free to contact your project specialist to discuss what is needed to get started on your loan.
11What are business advisory services? What is technical assistance?
Business advisory services are services that MACED can provide to your business through our consultants, workshops or classes. MACED may pay all or part of the cost of these services, generally for clients who have loans with us. Technical assistance is another term for business advisory services. Technical assistance can also mean assistance MACED provides for energy efficiency audits.
12If I have a low credit score, can I get a loan from MACED?
MACED looks at a variety of factors when deciding on a loan. We consider the credit score, but we also consider entrepreneurial experience, community impact, what the entrepreneur is able and willing to invest in the business, the business’ financials (if an existing business) and projections, purpose of the loan and risk. Many of our borrowers have credit scores that disqualify them from getting a traditional bank loan. MACED offers a CrowdMatch Microloan product that uses crowdfunding, instead of traditional underwriting, as the main criterion for approval. A low credit score would not be a problem in getting a CrowdMatch Microloan.
13I have never applied for a business loan. How can I compare lenders?
Venturize is a nonprofit organization that offers unbiased information about business lending. We invite you to view their website to answer questions about the different types of loans and lending institutions. Their site also has a glossary that may be useful.