Below are answers to questions you may have about Common Capital and our loan programs.
What is a CDFI?
Community Development Financial Institutions (CDFIs) strengthen communities by providing financial services to underserved populations and markets. CDFIs are certified by the Community Development Financial Institutions Fund (CDFI fund) at the U.S. Department of the Treasury, which provides funding to CDFIs through a variety of programs. Common Capital has been a certified CDFI since 1997.
What are business assistance services?
Common Capital recognizes that business success is dependent on access to professional guidance and skill building as well as adequate capital. Common Capital actively works with our clients to provide access to qualified business assistance services to help you succeed. Common Capital provides business assistance directly through our staff, individual business consultants who have specialized knowledge, and our partner organizations.
Our Business Assistance Services may address the following:
- Managing the growth of your business
- How to manage your cash flow
- How to price for profit
- Responding to the market-looking for opportunities
- How to reach your market
- Tracking and understanding your business finances
What is Common Capital's geographic area?
Common Capital provides loans and business assistance to the counties of Berkshire, Franklin, Hampshire, and Hampden in Massachusetts. We also cover a portion of Worcester County.
Who is eligible for financing or receiving business assistance?
Common Capital provides financing to for-profit, cooperatives and in certain circumstances, nonprofit businesses. Common Capital has identified several values which define and are reflected in its work. Our work is intended to have a direct positive impact on the community, which may include any or all of the following: increased employment opportunities, neighborhood revitalization, providing essential community services, and promoting a healthier environment.
Borrowers are eligible to apply for a loan from Common Capital if:
- The entity is located in our geographic area listed above
- The borrower can demonstrate business or project viability with the proposed funds
- The borrower will provide available collateral to support the loan
- The borrower can demonstrate adequate future cash flow or financing sources to repay business or project debt
- The owner has a substantial commitment to the business or project
- The business is owned by individuals whose character and skills indicate strong commitment to successfully utilize the funds and/or complete the project in order to fully repay the loan
What can the loan be used for?
Funding from our loans can be used for:
- Working capital
- Accounts receivable and inventory financing
- New or used equipment purchase or improvements to existing equipment
- Real estate if related to the business activity or related to a specific development project
- Building renovation or expansion to benefit operating business
- Leasehold improvements
- Debt refinancing that improves cash flow and as part of defined plan which increases business viability
- Purchase of an existing business
- Start-up costs of a new business
Common Capital does not make loans:
- To businesses engaged in an illegal activity
- For personal use
- For payment of delinquent taxes
- For liens placed by third parties
- To businesses that are delinquent on government obligations or taxes that are not in a repayment plan
How do I know if I am ready to apply?
You should be able to answer the following questions and have the associated documents described below:
- Can you describe, in detail, your business products and services, sales and marketing, and financial goals? A business plan (for start-ups) or business background on your company will encompass these topics and will be required with your loan application. For assistance with writing a business plan, visit a great resource from the SBA HERE.
- Do you know why you need a loan? Create a list of loan uses and describe how they will help your business grow.
- Do you keep up-to-date with your business and personal finances by tracking your income and expenses? Historical financial statements and/or three years of projected financial statements and cash flows are required with your loan application.
- Do you have an adequate form of collateral? You will need to have information on collateral including appraisals, tax assessments, invoices, etc. when you submit your application.
Who can provide assistance for writing my business plan and preparing my financial statements and projections?
How do I apply?
Is there a fee to apply?
Yes. Common Capital charges a $100.00 fee for all loan applications except our Fast Track Loan. The fee must be paid when you submit the application for review.
What are the loan terms?
Specific loan terms will be based on the nature of the financing need, the business circumstance and anticipated cash flow. Common Capital determines the interest rates for individual loans based on the risk of the loan, available funding sources, and general business considerations. Common Capital believes itself to be a higher risk lender, providing loans to applicants who may not have access to conventional financing sources, and therefore Common Capital generally assigns an interest rate that is higher than the market rate as indicated by the prime rate. Common Capital also provides additional no-cost services, including business assistance to its borrowers.
How long does it take to get a business loan?
Once we have a fully completed application package, it can take 4-6 weeks to complete the loan underwriting process loan decision and fund the loan. This time frame depends on how quickly the requested loan documentation is received. Loan approval timing is also affected by the size of the loan, if a loan guarantee is required, and the type of collateral. Our Fast Track Loan Program provides a 2 business day turnaround on a loan decision and funding within a week.
Will I need to provide a form of collateral?
Yes, Common Capital typically requires collateral for all of its loans. Common Capital will consider available collateral in its underwriting, and will take an appropriate security interest in available business or personal assets to support financing. Common Capital does not always require dollar for dollar on collateral coverage, but it does expect the pledge of some assets, business or personal, with some tangible value.