Answers for the Most Commonly Asked Questions
What is Neighborhood Progress Fund?
Neighborhood Progress Fund is a nonprofit group that offers small business loans and business development services to entrepreneurs and businesses in distressed communities. We’ve served the Greater Philadelphia Area for twenty years, beginning in the Empowerment Zone of North Philadelphia and expanding beyond to help stimulate economic growth throughout the region.
How is NPF different from a traditional lender?
All lenders take on risk when funding small business loans. So in an attempt to determine if a loan is too risky, they will analyze certain criteria, known as the “4 C’s” which stand for Credit, Character, Capacity and Collateral. A poor credit history or lack of collateral will likely result in a rejection from a traditional lender. As a nonprofit, Neighborhood Progress Fund’s model is different from a traditional lender. Our criteria allows the flexibility to take more into consideration when determining eligibility for a loan, such as the impact your business will have on the community. And, unlike traditional lenders, Neighborhood Progress Fund’s approach includes much needed business development mentoring that helps customers navigate through the process of securing a loan and running a successful business.
How does NPF determine if I am eligible for a business loan?
1. Credit Report
Although we don’t have a minimum credit score and seek to partner with entrepreneurs and businesses that struggle to qualify for traditional loans, we use the credit report as a component of our analysis. The credit report is used to evaluate how you have handled debt in the past.
2. Character of Management
In our experience, character of management is the foundation of a successful loan. The success of a business is dependent upon the qualifications and the experience of management and the principals behind the business. They are ultimately responsible for the use and repayment of borrowed funds.
3. Capacity to Repay
To evaluate your ability to repay the loan, we look at industry trends, the local business environment, basic operating and competitive position, financial position and sources of liquidity, and company financial structure. In addition, we review the last three years of financial statements (balance sheet, income statement, cash flow statement) to project the future performance of the company. These projections are the main source of information to indicate if there should be sufficient cash flow to repay our loan.
Collateral is the cash and assets you pledge to secure the loan. The amount and quality of the collateral will give us the additional comfort to move forward with the loan. Not only do collateral assets generate cash flow to pay our debt service but they also provide a source of repayment if the loan does not perform.
5. Community Impact
Most importantly, we evaluate the impact your business will have on the lives of residents in their communities. We believe that housing, education, childcare, healthcare and healthy food access have the greatest impact on a community’s revival. In addition, we place a high emphasis on businesses that will create a large amount of jobs for residents. We are more willing to move forward with a transaction that is deficient in the standard 4 C’s if the impact on the community is undeniable.
What if I have been previously rejected by traditional lenders?
It’s ok. In fact, many of our customers went to traditional lenders first. You may still qualify for a loan and we will help you navigate the process. We help with credit counseling, loan application assistance, business plan assistance and business strategy consultation so you can become a stronger candidate for a loan with us and eventually at a traditional bank. The first step is to meet with us and tell us your story. We will guide you every step of the way to make sure you have the best chance at securing the loan you need to start or grown your business.
How do I apply for a loan from Neighborhood Progress Fund?
You can email us at email@example.com, call us at 215-232-0516 or come visit our location at Liberty Square, West Tower 1300 W. Lehigh Avenue, Suite 100, Philadelphia, PA 19132. We will discuss your needs and help you complete the application for a loan. Or, if you’d like to get a head start, complete the inquiry form at npfp.org and we will contact you to schedule a meeting.
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