Get answers to some of the Frequently Asked questions about loans from Penn Regional Investments.
How do I apply for a business loan?
Fill our our Loan Program Inquiry Form or call 878-214-8008 to receive an application by mail. Once we have reviewed your inquiry form, we’ll respond to you with a link to enter detailed information into our secure online loan portal.
How long does the process take?
Once Penn Regional Investments has received a completed loan application and any additional information requested the process is quick and confidential.
Do I need to have a bank to qualify?
No, a bank is not required to qualify for a business loan. However, partnerships in which Penn Regional Investments finances 50% of a project and a local bank finances the remaining 50% of the projects are common.
Who qualifies for a business loan?
Any new or existing business in the Penn Regional Investment’s service area may qualify for a loan. However, the business will need to provide collateral and show an ability to repay the loan.
How are you different from a regular bank and who qualifies?
The Penn Regional Investments Loan Fund is a non-profit organization that exists to make an impact on economic development in the area of small business ownership in the communities we serve. The Penn regional Investments operates out of a home office in Greensburg. We do not offer deposit accounts like checking or savings like banks, and lend only for community development purposes. We lend to people of low-to moderate- income that have been historically underserved by traditional financial institutions. We also lend to people starting businesses or who already have businesses in existence in low-income census areas. Banks usually do not lend to start-up businesses while over 75% of Penn regional Investments loans involve start-ups and businesses in existence less than two years.
How much can I borrow and for how long?
We can provide loans from $500 - $10,000. The longest term for a loan is typically seven years. It is all dependent on the amount of the loan. We exist mainly to lend to small projects with the goal of bringing those small business borrowers, after successful loan performance with us, into the financial mainstream where they will have access to larger amounts of capital from a bank.
What are your interest rates?
While typically our rates are competitive, they are usually at or below market interest rates for the types of projects we are lending to in the community. In addition, prudent lending practices dictate a relationship between the risk of our loans and the interest rates we charge. Our rates reflect the increased risk we are willing to take on behalf of our borrowers. We will not compete with banks and do not want to attract their borrowers – this would crowd out the types of people we want to help.
Is my credit history important?
Your personal credit history is one of the most important factors in any lending decision. It is the clearest indication of your willingness and ability to repay loans. At Penn Regional Investments, it is one of the main factors we take in to consideration however we do look at a number of other factors when considering a loan application. If your credit history is in need of repair, you should carefully assess whether this is the right time for you to be starting or expanding your small business. Your ability to borrow will be seriously impaired and if you do find a willing lender, it will likely involve loans at very high rates and fees. This does not set your small business up for success. We want to see your small business succeed in the short and long term.
Do I need collateral?
You may. Every loan and every business’s circumstances are different. With our focus on start-ups and small business we understand that collateral can be a challenge. However, it is a good faith gesture on your part. Red flags go up when a potential borrower does not offer any collateral to secure the loan and wants Penn Regional Investments to take all the risk for their business. At times we may also consider requesting a co-borrower on the loan. Offering assets that you have such as automobiles, your home or other real estate demonstrates you are as confident in your business as you would like us to be – it also shows commitment and character.
Do I need a business plan?
Yes. A Business Plan is very useful and is a part of our application packet. It lists questions Penn regional Investments likes to have answered about your business. You do not need to take the time or expense to present us with a lengthy, bound presentation. However, we do like to see that the proper time and effort has been taken to show you have a clear understanding of the type of business you are about to start. In case you need assistance with this, we are also available to help guide you through the process of writing your Business Plan.
How long does the approval process take?
Once we have a completed application package we will aim to have an answer to you within a few weeks. Each loan package needs to have a written “Credit Memo” completed which explains in detail your loan request and your respective financial and business strengths and weaknesses. Every memo is analyzed very carefully to balance our mission to support small businesses with our need to be paid back. Our turnaround time after approval will depend upon how heavy a loan volume we are experiencing, the complexity of your request and the source of funds for your loan. Three to four weeks has been our experience. If we expect it to be longer, we will alert you.
If I am approved, when can I expect my money?
We make every effort to get your loan proceeds to you quickly. Currently our loans are disbursing between one to two weeks from approval. The approval time could take up to four weeks. Again, if we expect it to be longer, we will alert you.
When do I have to start re-paying the loan?
A payment schedule is set up between you and Penn Regional Investments upon loan approval. You can expect your first payment to typically be within two months after the loan has been disbursed. Incidentally, we do not charge prepayment penalties for early payments or pay-offs.