Strive Toward Entrepreneurship Program (STEP)

Economic Ventures Inc.’s Community Microloan
Strive Toward Entrepreneurship Program (STEP)

Economic Ventures, Inc. (EVI) supports economic development in our area by helping to create and expand small business, with emphasis on benefiting low- to moderate-income individuals and communities. One of the ways EVI does this is by providing small, low-interest loans to qualified entrepreneurs who cannot obtain traditional (bank) financing.

To further enhance the entrepreneur’s ability to succeed, EVI offers business counseling and support; classes, workshops and seminars; partnering with business mentors; networking opportunities; and use of a Business Resource Library and an Internet-accessible computer lab.

Basic Loan Information

Amounts: $500 to $10,000. The first loan must be $2,000 or less. Each time a loan is repaid, the client is eligible to borrow again.
Interest Rate: Prime (currently 4.0%) plus 5.75%
Term: 6 months to 60 months (5 years), depending on the loan amount
Eligible Uses: Working capital, purchase of inventory or equipment, advertising/marketing materials, business-related education, or other direct and necessary business expenses

Basic Qualification Criteria

To be considered for the microloan program, an applicant must:

Be a resident of, have an existing business in, or start a business in the City of Knoxville or Knox County.
Be current on Federal Income Tax filings and payments.
Be current on all child support payments, or provide information about extenuating circumstances affecting payment status.

Be current on all student loan payments, or provide information about extenuating circumstances affecting payment status.

Not have a bankruptcy discharged or a foreclosure in the past three (3) years.
Not be incarcerated.

Getting a Loan

1. Registration and Application

The client makes an appointment with a Client Services Coordinator to register and complete the Program Registration Form & Loan Application. Clients must provide, a) Social Security number, 2) personal financial statement, and c) basic sales (or estimates/projections) and other business information.

Clients may complete the application at home and mail it to EVI, but must still schedule a follow-up appointment with a Client Services Coordinator to review the information. Clients will be asked to authorize EVI to access a credit report, but they will not be denied access to a loan based solely upon a low credit score or lack of a credit score.

For loans requests of $4,000 or more, the client may be required to provide a business plan, loan collateral, or capital.

2. Application Review

EVI’s Loan Administrator will review applications and do one of the following:

a. Ask for additional information,

b. Schedule an interview,

c. Approve the loan for the amount requested,

d. Approve a lower loan amount, or

e. Deny the loan request because standard criteria are not met.

If a loan request is approved, the client will meet with the Loan Administrator to “close” the loan. This involves signing a promissory note: a legal document outlining the terms and conditions of the loan. The client will receive a loan check at closing. On loans of more than $4,000, the client is responsible for paying any out-of-pocket closing costs.

The due date of the first payment is determined by the Loan Administrator, but is customarily one month later. Monthly payments include principal and interest. Other than loan interest and any related out-of-pocket closing costs, there are no additional fees for participation in STEP, unless payments are made late ($10 late fee per month) or checks are returned by the bank ($25 fee).

Though clients will be sent a payment reminder card each month, because mail can get lost, it is important that clients send in their payments even if they do not receive the reminder. Checks should be mailed to the address on the promissory note.

Once a loan is paid in full, the client becomes eligible to apply for another STEP loan, if he or she chooses to pursue one.

If a loan request is denied, EVI will either provide one-on-one business counseling and/or training, or make the appropriate referrals to help the client qualify for a future loan. A denial does not mean that a client cannot reapply in the future, as long as he or she successfully takes the steps outlined to address the weaknesses that were noted during the application analysis.

Note: EVI reports all loan activity to its credit bureau. This includes both positive and negative payment information.

To contact Economic Ventures, Inc.: Telephone (865) 524-0360 or e-mail: info@eviTN.org or their web site: http://www.evitn.org