Fresno, CA -- (SBWIRE) -- 08/14/2014 -- Rather than waiting for the government, or banks, to find the means and the money to help more small businesses, a crowd of small businesses has sprung up with a solution. They provide loans to other small businesses. The loans are fair and responsible, and it’s as simple as that. Some ‘sprung up’ many years ago – but they have never been more needed. And as small businesses themselves, they are perfectly placed to understand what is needed, and provide a quick, tailored response.

These small businesses are known as CDFIs (community development finance institutions). They use loans, grants and investments to provide loans to entrepreneurs, SMEs and social enterprises that are unable to get finance elsewhere.

Lisa Greenhalgh of Merseyside Special Investment Fund, a Liverpool-based CDFI says, 'Many people with good business ideas and existing small businesses that need funding to grow continue to be turned down for finance by traditional lenders. In many instances this is due to factors such as insufficient track record, poor credit scores or plans which lenders feel are too risky. Also, regardless of the opinion of their bank manager, national bank policies may impact the lending decision, such as sector exposure.

'CDFI’s are much more flexible and fill this funding gap, providing a vital source of finance without which many businesses would not be up and running or expanding.'

In fact, 8,400 small businesses are up and running thanks to getting a CDFI loan last year. Over sixty CDFIs operate around the country. And as Ian Smallwood of Let's Do Business Group in Hastings points out, small can be beautiful: 'One great benefit is that CDFIs tend to be local and operate in the same environment as the businesses that are applying for finance. Their staff know and understand the local economy, the positives and the negatives. They often have the ability to refer or signpost to other sources of finance that may be available locally.'

CDFIs are independent, and are focused on supporting local businesses, local jobs and the local economy. So they can be flexible in their approach, helping to match fund alongside banks or crowdfunders, providing the full funding – up to £100,000 in some cases – or just giving advice and support. There certainly isn’t a culture of 'computer says no'.

Neil Millington of First Enterprise Business Agency in Nottingham adds, 'A CDFI is more approachable, willing to listen and support the proposal and find a way to help a business not find a way not to help. We have a great knowledge of the SME sector and do not adopt a blanket approach with all propositions we assess each case individually on its own merits.'

CDFIs may be small but they’re also ambitious. Many are expanding the range of products and services they offer and are keen to help more businesses.

Jessie Singh, director of the Biz4loans, delivered that message to lead off the small business seminar Tuesday in celebration of Indiana Small Business Week.

“We are committed to offering opportunities to Gary residents who start and run, or who have current businesses. Those businesses need to fit with our vision for the future,” Campbell told the dozens of current and potential business owners who attended the seminar at City of Gary Annex, 839 Broadway.

The seminar organized by the U.S. Small Business Administration Indiana District Office in Indianapolis brought together speakers to explain how lenders provide business loans, how to get help writing a business plan and how to sell products to government agencies such as the Indiana Department of Transportation.

Regional director of the Northwest Indiana Small Business Development Center Lorri Feldt said the agency serves Lake, Porter, LaPorte, Starke, Pulaski, Jasper and Newton counties and works with small business owners and startup entrepreneurs.

Free one-on-one business counseling begins the process of using the NW-ISBDC, she said. Other services include monthly workshops, such as Launch ones Own Business and QuickBooks, providing valuable, high quality demographic data and connecting people with resources throughout the area.

To obtain the necessary financing or capital to open and sustain a business requires a detailed business plan, Feldt said.

“This is like a game plan for a sports team,” she said.

Marty Anderson, lead economic development specialist with the U.S. SBA Indianapolis office, said the SBA helps small business owners through the 7(a) Loan Program and the 504 Certified Development Company loan program.

“There are three C’s of the SBA – counseling, capital and contracting. We provide the public with mentoring, which is the counseling; access to capital and government procurement,” he told the group.

“Remember there are no grants for startups and to expand the business. What one get is a loan,” Anderson warned the group.

“The SBA’s role is primarily a guarantor of business loans made by financial institutions,” he said. “They are always 100 percent on the hook for the loan because we are using taxpayer dollars.”

For those with credit problems or no credit history, microloans can be an alternative to obtain startup capital to open a business and to repair credit ratings, said Kyle Johnson, a lending team manager from Accion Chicago.

Accion clients haven’t been able to obtain loans from banks because of low credit scores or no credit history, he asid.

“We’ve been lending for five years in Lake and Porter counties. We are more flexible on requirements (than standard financial institutions). As long as we can see what’s on their credit report, we can work with them,” Johnson said.

“Our interest rates range from 10 percent to 18 percent. It’s not as low as a bank, but it’s lower than a credit card,” he said.

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We believe entrepreneurship to be one of the most rewarding journeys that a person can pursue and that no two entrepreneurs are the same. Some seek a better life for themselves and their families while others take on the risk in pursuit of independence. Whether it is a small town where everyone knows each other or a big city that never sleeps, every community relies on entrepreneurs to create and provide jobs and to usher in new possibilities.

At Biz4Loans , we understand the challenges that entreprenuers face in financing their venture. We also understand that a startup entrepreneur frequently has to wear many different hats while her company is getting off the ground. This is why we provide a quick, convenient, and detail-oriented process that achieves results without unnecessary delays or obstacles. For more info visit http://www.biz4loans.com/