Loan Requirements

At LEDC, we want you to understand basic information about how we operate our Micro-Lending program. Read about the terms and requirements of our micro-loans.

For what purposes can business loans be used?

LEDC loans are term loans that can be used for working capital, equipment, inventory, advertising, and marketing, etc.

What documents are needed to apply for a loan?
Depending on the size of the loan and the applicant’s credit score, documents are required such as:

- Copy of applicable business licenses and permits;
- Financial statements including cash flow and profit and loss statements, and balance sheets if available;
- Lease agreement (if applicable);
- Proof of identification

Is there a minimum credit score necessary to apply for a business loan?
No. LEDC has been able to work with business owners with credit scores as low as 550.

Are there any fees?
Yes. There is one fee that is 3% of the loan amount for closed loans. There is also a $50 application fee.

What are the terms and interest rate of the Fund's loans?
LEDC offers installment loans and has the flexibility to set the term on all loans between 1 and 5 years based on the applicant’s needs. Interest rates typically range from 9 to 14 percent.

How long will the application process take?
Loans up to $10,000 are typically approved or denied approximately one week after all the application documents are received. Loans up to $50,000 typically take three weeks after all the application documents are received.

What factors does LEDC consider to determine whether or not a loan is approved?
LEDC takes a holistic approach to evaluating potential loan clients. We weigh many factors, such as the strength of the business, character references, availability of collateral, owner equity contribution, credit score, etc.

Are there any types of businesses that cannot apply for a loan?
Yes. Any business engaged in illegal activities or the sale of sexual-oriented goods or services, liquor stores, real estate and speculative investments are ineligible for the Fund's loans.

Are there any negative credit factors that make an applicant ineligible?
Yes. If an applicant owes back taxes to a State or the IRS or has not paid any court judgments or outstanding child support, he or she will not qualify for a loan.  

Can a start-up business apply for a loan?
Absolutely. That's what we're here for.

How can I start the process of applying for a loan?