FIRST LOOK WITHIN
The very first place to look for a much-needed cash injection for seeding your business is within. If you are thinking about owning your own business someday, devise a personal budget that you can stick with, eliminate your debt and shun any new debt, and then start saving –in that order. You should expect to inject 20% of what is needed by yourself.
FRIENDS & FAMILY
Ask your close friends or relatives to bankroll your venture. Many friends or family members will enter into an agreement through the use of a simple promissory note, but take into consideration broken relationships which may result should the business not perform as expected. If you go this route, handle your business dealings professionally at all times. Provide a business plan, even if it isn’t a requirement.
If you really want to demonstrate your commitment to professionalism and accountability—and put their money where your mouth is, check out Virgin Money (wwwvirginmoneyus.com) for practical how-to help for family lending.
SUPPLIERS & VENDORS
Suppliers may agree to provide goods, services, support, and/or attractive credit arrangements to you in return for goods, services, and/or a potential equity position. For example, a major product or material supplier may grant very favorable payment terms to allow extended time for receivables recovery and improving and/or stabilizing cash flow in return for exclusivity, larger orders, generous interest charges, and/or even possible equity.
CUSTOMERS
Additional revenue can be generated for a large capital equipment purchase by a short-term surcharge, for example, during the period January 1st to June 30th.
GRANTS AND SPECIAL-PURPOSE FINANCING
Contrary to popular belief there are no direct small business grants available from the federal government, but several state development agencies offer direct small business grants and financial assistance intended to encourage and assist entrepreneurs in starting or expanding a small business. Always check your local government sources (both city and state) to learn about any existing or new grant opportunities. Usually, grants are closely aligned with local strategic initiatives (i.e., energy efficiency, downtown/urban redevelopment, small business expansion).
CITY OF KINGSPORT
Kingsport Downtown Façade Grant Program
The City of Kingsport has specially developed a grant program to encourage the revitalization of building façade and to improve the aesthetics of the City’s Central Business District with grant assistance the Kingsport Economic Development Board (KEDB). Grant funds up to $5,000 per façade (up to $10,000 for a corner building may be granted and requires a dollar for dollar match. Grant award amounts are determined at the discretion of the Grant Façade Committee and the KEDB.
Apply for the Downtown Facade Grant now*.
Kingsport Housing and Redevelopment Authority (KHRA) Tax Increment Financing (TIF)
TIF uses net new tax revenues generated by a redevelopment project to help finance a project. Property value after redevelopment (x) tax rate (-) property value before redevelopment (x) tax rate (=) Amount Available for Redevelopment. Tax increment can only be generated by the increased taxes resulting from private redevelopment on land in a redevelopment on land in a redevelopment district. KHRA pays debt service on loan from TIF. (Include link to TIF Calculator). For more information, please contact KHRA. Â
STATE OF TENNESSEE
USDA Microloan Program for Rural Entrepreneurs and Business Owners
The scope of the loans will require a business plan to be in place. In addition, borrowers must be willing to attend business training workshops. Fixed assets and working capital loans are available from $500 to $10,000 (Prime minus three points). Collateral is required for loans greater than $5,000. All borrowers receive expert counseling and technical assistance from BERO over the life of the loan. Eligibility for the ECD-BERO Microloan requires that the business be located in a rural area as defined by USDA and the owner live in a rural area as defined by USDA. The business must have five or fewer employees (including the owner) and an inability to access a loan from the commercial banking sector.
Apply for the State of Tennessee ECD-BERO Rural Microloan now*.
Ronald Wade, East Tennessee Enterprise Specialist, representing the State of Tennessee Economic & Community Development Business Enterprise Resource Office, can be reached by email at ronald.wade@state.tn.us regarding the ECD-BERO Micro-Enterprise Loan Fund. If you have any questions, or would like to make an appointment, call (423) 392-8801. Additional information is available via the ECD-BERO website.
*RETURN ALL COMPLETED LOAN APPLICATIONS TO ATTN: Ms. Aundrea Wilcox, KOSBE Executive Director , Kingsport Area Chamber of Commerce, 151 East Main Street , Kingsport, TN 37660. You may also fax your application to 1-888-936-1221. If you have any questions, please call (423) 392-8801. If you apply online directly with the lenders referenced herein, your application will be electronically reviewed and it may be rejected, which will reduce the possibility of success for KOSBE when challenging a client's 'Not Approved' status.
LOCAL BANKS
The importance of small business to our local economy cannot be overstated. Commercial banks are the primary generators of credit to small business and, therefore, play a vital role in maintaining the health of the small business sector. Statistics show that some 60 percent of measurable small business financing comes from commercial banks.
BUSINESS PARTNERS
Having a business partner doesn’t always have to be a bad thing. The key to forming a winning partnership is including the correct contents in the agreement, including but not limited to: the amount of equity invested by each partner, type of business, how profits and loss will be shared, partners pay and compensation, distribution of assets on dissolution, provisions for changes or dissolving the partnership, dispute settlement clause, settlement in case of death or incapacitation, restrictions of authority and expenditures, and length of partnership. Choose a partner who compliments your skill set and adds value to the business.
LEASING OPTIONS
One of the biggest mistakes many entrepreneurs make when leasing commercial space is not reading the lease. If you are leasing space, does your lease allow you to lease out (sublease) unexpectedly unoccupied space under your purview in the future in order to generate revenue to pay the lease? Ask your attorney to read your lease before signing on the bottom line.SMALL BUSINESS INVESTMENT COMPANIES (SBICs)
Whether your business is in the early stages of development or already thriving and seeking growth capital, we want to help you determine if SBIC financing is right for your company – and if so, who in the SBIC community might be willing to consider an investment. Remember, the SBIC Program does not invest directly in small businesses. Instead, SBA puts its confidence in premier investment management funds to evaluate and invest in promising small companies. Â
• Click here to see a list of operating SBICs in Tennessee.
• Click here for the National Association of Small Business Investment Companies (NASBIC) website.
• Click here for the National Association of Investment Companies (NAIC) website, which dedicates financial resources to investment in an ethnically diverse marketplace.
 VENTURE CAPITAL FIRMS & ANGEL INVESTORS
In exchange for equity ownership in a business, venture capital firms invest other people's money in the most promising early-stage and later-stage businesses that are seeking outside investment.  Angels, on the other hand, invest their own money, and are usually accessed through a business contact, but sometimes they can be found through a consultant, attorney, accountant, or business adviser. In either case, a rock-solid business plan with professional support is usually required to get to an investor’s attention.  Business risk and return on investment are usually the major issues, rather than ownership sharing.
• Click here to see Entrepreneur.com's Directory of Top 100 Venture Capital Firms.
FEDERAL GOVERNMENT
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The mission of the Small Business Administration (SBA) is "to maintain and strengthen the Nation's economy by aiding, counseling, assisting, and protecting the interests of small businesses and by helping businesses and families recover from economic and other disasters.
Below is a brief summary of noteworthy changes that impact small business financing, as a result of the recent passage of President Obama's stimulus bill:
90 Percent Guarantee
The bill allows SBA to raise its loan guarantee from the current levels to as much as 90 percent for some loans. At present, SBA can guarantee loans up to 85 percent on loans up to $150,000, and up to 75 percent on loans greater than $150,000. The 50 percent guarantee on SBA Express loans would remain unchanged. Increasing the SBA guarantee percentage will encourage lenders to extend more capital to small businesses by increasing the share covered by an SBA guarantee.
Business Stabilization LoansÂ
The bill creates a new SBA loan program to provide deferred-payment loans of up to $35,000 to viable small businesses that need the money to make payments on an existing, qualifying non-SBA loan for up to six months. These loans will be 100 percent guaranteed by SBA. Repayment would not have to begin until 12 months after the loan is fully disbursed. The bill provides $255 million for this new program. These loans will help ensure that small businesses have time to re-focus their business plans in order to succeed in the long run.
ARC Loan Basics
• New, temporary, guaranteed loan program
• Deferred payment loan
• Up to $35,000
• Proceeds used to make P&I payments on qualifying small business loans (QSBL)
• Interest-free to borrower
• SBA pays interest to lender
• No fees charged by SBA or lenders to borrowersÂ
  --other than direct costs of securing and liquidating collateral
• Available until funding runs out or September 30, 2010, whichever occurs first
• Disbursement Period: Up to 6 months payments of principal and interest on one or more QSBL
• Deferral Period: Loan deferred for 12 months beginning after last disbursement
• Repayment Period: Loan repaid over 5 years
• Maximum Term: 6.5 years
• Max term will be less than 6.5 years if disbursement period is less than 6 months
MicroloansÂ
The bill expands SBA’s Microloan program, which provides small loans (up to $35,000) paired with technical assistance to start-up, newly established or growing small businesses. The bill provides funding to increase loans from SBA to participating Microlenders by $50 million through September 30, 2010, and adds $24 million in grants to provide technical assistance to borrowers. Historically, these loans reach low-income individuals, women and minorities in both rural and urban areas. Expanding this program through the stimulus bill will help ensure these entrepreneurs are not left behind in the credit crunch.
Refinancing
The bill also gives SBA the power to use the 504 Certified Development Company program to refinance existing loans for fixed assets, providing fresh support for small business expansion. This change will help business owners expand their current development projects and create jobs in their communities.
Secondary Market Expansion
The bill authorizes SBA to establish a secondary market for pools of “first lien” loans under the 504 program. These “first lien” loans from commercial lenders currently have no SBA guarantee. The bill authorizes SBA to deploy federal guarantees for pools of these first lien loans, so that they can be sold to investors in a secondary market. Providing liquidity for these first mortgages will help encourage lenders to continue participating in SBA’s 504 loan program, which provides a key source of capital for community development and other projects.
The bill also empowers SBA to set up a Secondary Market Lending Authority that would make direct loans to broker-dealers that participate in the secondary market for SBA-guaranteed 7(a) loans. These broker-dealers would use the funds to purchase SBA-backed loans from commercial lenders, assemble them into pools and sell them to investors in the secondary loan market.
This program may help address some of the issues facing the secondary market for SBA loans and may ultimately help SBA lenders make new loans to borrowers.
Investment Program
The bill helps SBA-licensed Small Business Investment Companies (SBICs) and families of SBIC funds better leverage the capital they use to invest in small businesses. The bill sets maximum levels of funding the agency can provide to these companies at up to three times the private capital raised by those companies, or $150 million, whichever is less. It also raises the percentage any one SBIC can invest in a single small business to 10 percent of total capital, and raises from 20 percent to 25 percent the percentage of any licensee’s dollar investments that must be made in “smaller” businesses.
Surety Bonds
The bill also raises the maximum contract amount that can be covered by an SBA guaranteed surety bond from $2 million to $5 million, and, under certain circumstances, for contracts amounting to $10 million, and provides additional funds to cover the costs of expanding this program. Small businesses need surety bonds in order to bid on and obtain many federal and other contracts. SBA guarantees surety bonds to small businesses that private surety companies would not otherwise be able to extend.
For more information concerning the above SBA loan programs, such as when they will be available, eligibility, etc., please contact Ms. Aundrea Wilcox, KOSBE Executive Director , Kingsport Area Chamber of Commerce, 151 East Main Street , Kingsport, TN 37660, or call (423) 392-8801.Â
JOINT VENTURES
occur in a wide variety of forms and can even involve direct competitors in teaming arrangements. Sourcing is usually with professional financial and business advisors requiring a good professional support team, and solid business planning.
LICENSING
An inventor can either sell his or her invention, after it is patented, or retain ownership of the invention. An inventor can also license a product to raise capital. If an inventor wants to reach the next level of success, he or she should license the invention, make plans (a written business plan) to produce the invention, and develop strategies for maximizing profits.
NON-TRADITIONAL LENDERS
Georgia Certified Development Corporation (GCDC)
GCDC provides powerful tools for economic growth in Georgia and Tennessee by partnering with lenders to provide SBA 504 Loans to the community. GCDC has lent over $70 million and created/retained over 2,405 jobs. The U.S. Small Business Administration granted approval for GCDC to operate as a 504 Certified Development Corporation in Georgia as well as Tennessee. GCDC has approved loans for several restaurants, such as Kani House Japanese Steak House, Copeland’s, Merlot Restaurant, Q-Time Restaurant, as well as spas, hair salons and beauty clinics; adult day care and childcare facilities; gyms and wellness centers.
Download Lender's Loan Application Now!*
*RETURN ALL COMPLETED LOAN APPLICATIONS TO ATTN: Ms. Aundrea Wilcox, KOSBE Executive Director , Kingsport Area Chamber of Commerce, 151 East Main Street , Kingsport, TN 37660. You may also fax your application to 1-888-936-1221. If you have any questions, please call (423) 392-8801. If you apply online directly with the lenders referenced herein, your application will be electronically reviewed and it may be rejected, which will reduce the possibility of success for KOSBE when challenging a client's 'Not Approved' status.
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Southeast Community Capital (SCC) has opened an office in Kingsport. SCC provides access to capital for small and disadvantaged businesses in the southeast.
Targeted Companies:
• Early stage companies ready to crossover to expansion stage
• Expansion stage companies needing capital for accelerated growth
• Companies with inconsistent growth and profitability
• Companies with good ideas and strong management that do not have access to traditional financing sources
• Entrepreneur with many years of experience in an industry
• Growing companies with limited working capital or historically under-capitalized revenues from $50M to $5MM
• Strong CEO and management team
• Compelling business characteristics and attractive growth prospects
• Opportunity to generate cash flow quickly
• Recurring revenue and good earnings visibility and potential
• Potential for diversified customer base, markets and industries served
• Well defined niche businesses with defensible market positions
• Preferred industries include: Business Services, Technology Based, Government
• Contracting, Software, and Specialized Manufacturing
Types of Lending Typically NOT Considered, but Will Review on a Case-by-Case Basis:
• Retail Clothing
• Restaurants
• Speculative real estate
• Start-up businesses where the principal has no prior industry experience
• Businesses that primarily sell alcohol and cigarettes
• Businesses that will re-lend the money to others
• Refinancing of existing debt
• Financing of franchise fees
• Non-profit organizations
• Transportation and Warehousing (Trucking Companies)
Click here to schedule an appointment with a Southeast Community Capital East TN Representative.Â
Download Lender's Loan Application Now!*
*RETURN ALL COMPLETED LOAN APPLICATIONS TO ATTN: Ms. Aundrea Wilcox, KOSBE Executive Director , Kingsport Area Chamber of Commerce, 151 East Main Street , Kingsport, TN 37660. You may also fax your application to 1-888-936-1221. If you have any questions, please call (423) 392-8801. If you apply online directly with the lenders referenced herein, your application will be electronically reviewed and it may be rejected, which will reduce the possibility of success for KOSBE when challenging a client's 'Not Approved' status.
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Sue Malone is the founder of Strategies for Small Business. Her sole mission for the last five years has been to help people obtain access to capital
to start or expand their businesses. In doing so, one of her specialties has been small business start-up loans. And she has done so exceptionally well. She is the undisputed, number one SBA loan provider for the Community Express Loan Program in the nation. As of April 2008, she is responsible for closing over 20,000 of these much needed loans.
Learn About the Patriot Express Loan for veterans and their families.
Apply for SBA Community Express Loan ($5,000 to $25,000)
*RETURN ALL COMPLETED LOAN APPLICATIONS TO ATTN: Ms. Aundrea Wilcox, KOSBE Executive Director , Kingsport Area Chamber of Commerce, 151 East Main Street , Kingsport, TN 37660. You may also fax your application to 1-888-936-1221. If you have any questions, please call (423) 392-8801. If you apply online directly with the lenders referenced herein, your application will be electronically reviewed and it may be rejected, which will reduce the possibility of success for KOSBE when challenging a client's 'Not Approved' status.
PEER-TO-PEER LENDING
Peer-to-peer lending eliminates the need for borrowers to go through a bank for a loan. Lending Club, a personal loan and lending investment company, opened in 2007 with one simple mission: create an alternative to banks that offers both borrowers and investors a great rate. Lending Club welcomes applicants with a FICO score of at least 660. Small business owners and entrepreneurs can borrow up to $25,000—just apply online and get an instant rate quote. Â
Other time-tested peer-to-peer lenders include www.zopa.com and www.prosper.com.
 
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►City of Kingsport ►Kingsport Area Chamber of Commerce ►USDA Rural Development ►Kingsport Economic Development Board (KEDB) ►Eastman Chemical Company ►US Small Business Administration (SBA) ►Tennessee Business Enterprise Resource Office (BERO)
151 E Main St • Kingsport, TN 37660 • PH (423) 392-8801
