Business Loans: Frequently Asked Questions
Who can apply for a loan?
We provide business loans to both existing and startup businesses.
Startup businesses are considered those businesses that have generated sales for less than two years. Startup business owners are required to work with a business counselor/advisor to create their business plan and financial projections before beginning the loan application process. We have counselors available for this service at no cost.
Existing businesses that are expanding will be required to have a written expansion plan along with at least one year of financial projections. We have counselors available for this service at no cost.
Get started with a business counselor below.
What kinds of loans are available? How much can I borrow?
Under our Direct Lending Program, we offer Term loans only. This means we do not offer business lines of credit at this time.
How much can I borrow?
Loan terms and availability are determined by the counties covered under our lending programs. The following loan amounts are available to businesses in the listed counties:
- Up to $150,000: Yolo, Sacramento, Placer, Nevada and El Dorado counties
*If you are outside of these service areas, please click here to find a resource near you.
What can the loan funds be used for?
- Working capital (this can include salaries, utilities, marketing, advertising, lease payments, etc.)
- Inventory purchase
- Acquisition and/or repair of machinery and equipment
- Tenant improvements
- Acquisition of existing business if the acquisition facilitates a significant expansion of the business
Please note: Refinancing debt or debt consolidation is generally not an eligible use of funds under our programs.
What additional requirements do you Have for Start-Up businesses?
Generally speaking, to be considered for start up financing we require a secondary source of income and industry experience related to the new business.
What are the loan terms, interest rates, and fees?
Loan terms can range from 5-7 years, and there are no penalties for early repayment of loans. All loans will be fully amortized, which means that they require payments of the same amount each month. Automatic withdrawal (ACH) is required for all payments.
Loan interest rates are up to 9.75%.
Loan fees include:
- Non-refundable Application Fee of $100 required once Letter of Interest is issued
- Loan fees of 3% of the loan amount
- $150 loan documentation fee
Do you use my credit score to qualify me for a loan?
No. We look at your credit score, but we rely primarily on your history of handling credit, good or bad, to help determine if you qualify for the requested loan.
But keep in mind, we do expect you to be current on all debt. Also, we expect you to provide a letter of explanation for any derogatory issues, like late payments and collection accounts.
Do you require collateral?
Yes. Collateral may include various types of business assets such as accounts receivable, inventory, equipment, business and/or personal real estate.
Do you require a personal guarantee?
We require a personal guarantee for anyone who owns 20% or more of the business. We also check the credit for anyone who owns 20% or more of the business. A guarantor is also required to submit personal financial statement and tax returns as part of the loan application.
What documents do you require, and why?
Click here to print the list. The documentation we require is similar to all lending institutions. Missing or incomplete documentation will delay the loan application process, so preparation is key. Before you apply for a loan, you should have the following documents ready:
- Business tax returns – Allows us to verify business income and understand the financial performance of your business over time.
- Profit and Loss Statement – Helps us understand recent financial performance. Click here for a video on how to put together a P&L statement.
- Balance sheet – Helps us understand the assets and liabilities of your business. Click here for a tutorial video on creating a balance sheet.
- Last 3 months business bank statements – Allows us to understand the cash flow dynamics of your business.
- Business debt schedule – Informs us of other outstanding debt at your company, if any, and allows us to calculate future monthly debt service payments. Click here for a free template and instructions.
- Personal tax returns – Allows us to assess additional income sources. Click here for info on getting copies of your personal tax returns.
- Personal Financial Statement – Allows us to assess personal assets and debts. Click here for a free template.
- Current written Business Plan for Start-up businesses (considered any business less than 2 years). Work with the Women’s Business Center or the Sacramento Valley SBDC to get help writing your business plan. Remember, working with a business counselor is required for start-up businesses to apply for a loan from us.
For start-up businesses, two years of financial projections, prepared on a month-to-month basis, including an explanation of how the revenue (income) and expenses were calculated. Your business counselor can assist with these projections.
For expanding businesses, we require a written expansion plan and one year of financial projections prepared on a month-to-month basis. Work with a business counselor if you need help with these items.
How does the application process work?
We break the process down into four steps, including a three-part application. Note that the amount of time needed for each step will vary based on your preparation, and you may be asked for additional documents and information multiple times during the process.
Step 1 – Pre-Application
1. Register for services here: Sign-Up
2. Fill out our Lending Inquiry Form.
3. If you meet our initial eligibility criteria, you’ll receive an email with a link to our loan application platform, Lenderfit. Click the link in that email, and create an account. Make sure you check your junk folder if you don’t receive the welcome email.
4. Note that your pre-application is NOT COMPLETE, until you make an account on Lenderfit. If you have problems setting up your account, please contact us at [email protected].
Step 2 – Application
1. Once you’re logged into your Lenderfit account, you’ll see a checklist outlining the application process, as well as the first set of documents we require to evaluate your request.
2. Complete the Application Phase on the checklist.
3. We will review and respond to inform you of your eligibility to move forward to the final application stage. Please send any questions you have directly through the message feature on the Lenderfit portal.
Step 3 – Final Application Stage
Once we confirm you are eligible for the final application stage, we’ll ask you to submit additional documents as outlined on the next phases of the checklist.
Step 4 – Notice of Approval or Denial
Once we’ve reviewed your complete loan application package, we will make a decision to approve or deny. The Loan Officer will contact you with any additional questions during this time.
How long does it take to get a loan?
It depends! The length of time this process takes is directly related to how prepared you are as borrower to apply, based on our requirements stated above.
Once you provide us with a complete loan application package, it can typically take 60-90 days to obtain loan approval and fund your loan.
This timeframe does not include time spent on business advising services.
What if I'm not approved for a loan?
California Capital FDC is a nonprofit dedicated to empowering small businesses. If we can’t offer you a small business loan, then we will either connect you with a business counselor who can work with you to identify another lender or refer you directly to another community lender.
What if I lose my Lenderfit login?
What is the State Loan Guarantee Program?
Through the State Loan Guarantee Program (SLGP), California Capital does not offer loans directly to borrowers. Instead, the program encourages banks to make small business loans to borrowers. California Capital can then provide a guarantee to the bank for those loans.
This guarantee encourages the bank to make a loan that they may not otherwise offer to a borrower. California Capital has relationships with partner banks to whom we can refer borrowers.
Guarantees are available to small businesses located within California with 1-750 employees. Through the SLGP, we can provide up to an 80% guarantee on bank and non-bank loans, with a maximum guarantee amount of $2.5 million.
The Guarantee can have a term of up to 7 years (note that the Bank’s loan terms can be longer). There is a fee of 2.5% of the loan guarantee and a $250 loan documentation fee. To get started, contact the SLGP team at: [email protected].