Archive for the ‘Money’ Category

Tuesday, December 15th, 2009

Whole Foods Is Loaning Millions To Local Producers

I was looking to see if Whole Foods carried Justin’s Peanut Butter and I happened across this page on their site. Who knew that Whole Foods was providing up to $10 million in low-interest loans to small, local producers? To be eligible, your company must be a local (within a few miles of a WF store) producer of a high quality product, and they prefer that you have an existing relationship with Whole Foods, although that doesn't seem to be a requirement. You may not be a startup company. (Well, you may be one, but they won’t loan you money through this program.)

wf

Loans range from $1,000 to $100,000 to be used for investing in and growing your business. The current interest rate for their loans is from 5% to 9%, and there is a $65 processing fee. This fee covers the cost of obtaining a credit report and processing the loan documents and is only charged if your application is approved for further review. That is the only fee charged. The Local Producer Loan Program does not charge closing fees or prepayment fees.

I know this doesn’t apply to many of you, but I wanted to get the word out for those who do qualify. With credit lines and business loans drying up (for the moment), this is an amazing opportunity. Please pass this information on to others. Whole Foods Loan Program

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Wednesday, September 23rd, 2009

Peer-To-Peer Loans With Lending Club And Prosper Loans

Staying with the theme of money, another alternative for small businesses is peer-to-peer loans. Two such companies are the Lending Club and Prosper.

Dollar

Lending Club is a social lending network that connects investors and borrowers. The loans are provided at rates that are usually better than regular banks, and loans can be for as little as $1,000. The club only approves US credit worthy borrowers, which they define as people with a FICO score of at least 660 with a debt-to-income ratio (excluding mortgage) below 25%.

If you are approved for a loan, it will be for a fixed rate with a life of 3 years. You will post your loan request online and lenders will agree to fund your loan in varying amounts. It may take up to 2 weeks to get fully funded.

Prosper Loans is another peer-to-peer lending company. It is similar to Lending Club in their approval process and their loans have a life of 3 years and are repaid at a fixed rate.

When you post your loan request with Prosper, you also choose the maximum interest rate you're willing to pay. Your listing displays a summary of your credit history, and a personal note to the lenders telling them about yourself, your business, and how you plan to use the loan. Lenders read all of this and then bid on your listing. Subsequently, your interest rate could be driven down by the auction bidding.

This service (for both companies) is unavailable in some states, so check their FAQ pages. I really love what these companies are doing.  Obtaining a loan has become difficult, but there are alternatives out there.

Peer to peer lending is another facet of the emerging social lending movement. It will be interesting to see how this trend evolves. I will share information on any new opportunities as they are created.

Lending Club

Prosper

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Tuesday, September 22nd, 2009

Manage Loans From Family With Virgin Money

Money, money, money. It is a huge concern for everyone these days, and small and micro businesses are no different. I recently posted a video saying you don’t need a lot of money to start a business, and I firmly believe that. But you may be at a point where a micro loan will allow you to take your business to the next level.

I recently wrote about micro loans that are backed by the SBA (read about it here). This is a great option, but it is not the only alternative. Richard Branson has established Virgin Money to handle your personal loans. 

Virgin

If you have a friend, family member or even an acquaintance that is interested in investing in your startup, you don’t have to do it with just a handshake and a do-it-yourself contract. To keep these money situations from getting kind of sticky, you can contact Virgin Money and have them manage your loan agreement. 

Virgin Money is a pioneer in the emerging social finance sector. They've helped thousands of people manage over $370 million in loans with relatives and friends. You and your private lender determine the terms of the loan and Virgin Money will take care of the loan documents, electronic fund transfer, emailed statements, and year-end reporting. Read more here Virgin Money.

Handling your business loan this way will show that you are serious about repayment, and it will help protect the personal relationship. Cruise around the site and check out their loan options for school and mortgages. This is such a cool idea. Let me know if you decide to take advantage of their services.

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