• How does an HBDi loan differ from a bank loan?

    o HBDi loans offer fixed, below-market interest rates.
    o Flexible terms, such as collateral coverage and loan-to-value ratios, are available.
    o Credit terms are more accommodating compared to traditional bank loans.

  • What are the fees associated with getting a loan?

    o Application fees: $75 for Micro-Enterprise loans, $200 for Small Business loans, and $350 for Fast Track loans (refundable if not approved).
    o Origination fees: 1% for Micro and Tandem Loans.
    o Legal fees and closing costs range from $350 to $650.

  • How long does it take to receive funding?

    o Small Business loans: 7-20 days from funding application.
    o Fast Track loans: Processed within three business days.

  • How important is my credit history?

    o Credit reports and scores are reviewed for all loan requests.
    o Fast Track Loan applicants need a minimum credit score of 640.
    o Flexibility is exercised in reviewing credit history.

  • What kind of businesses are ineligible to apply?

    Ineligible businesses include adult entertainment, gambling establishments, and those deriving over 51% of revenue from liquor sales.

  • What are ineligible uses of loan proceeds?

    Loan funds cannot be used for refinancing debt, investments, residential properties, or speculative real estate.

  • Are there any geographical boundaries?

    o Businesses must be located in Houston to be eligible for HBDi loans.
    o Fast Track loans require a low-income neighborhood location.

  • What assets can be used to secure a loan?

    Acceptable collateral includes unencumbered business and personal assets such as real estate, equipment, inventory, and accounts receivable.

  • Can loans be prepaid?

    o Micro and Small Business loans can be prepaid without penalty.
    o Fast Track loans have a prepayment penalty of 10.25% if repaid within the first year.

  • Do you require personal guarantees?

    Any principal with 20% or more ownership must guarantee the loan.

  • Do you assist start-up businesses?

    o Yes, start-ups must provide a detailed business plan and inject 15-33% of capital into the business.
    o Relevant industry and management experience, as well as sufficient cash flow and collateral, are required.

  • What is a Tandem Loan?

    o A Tandem Loan combines an HBDi loan with a matching loan from a commercial lender.
    o HBDi funds some of the debt capital, while the bank provides the remaining balance.

  • Should I apply for a Tandem Loan with the bank or HBDi?

    o You can initiate the request with either the bank or HBDi.
    o HBDi's tandem loan provides gap financing when a commercial lender cannot meet the total capital requirements.

  • When must the jobs be created?

    o Borrowers have two years from the funding date to create the required jobs.
    o Job creation progress is monitored annually.

  • Does HBDi provide grants?

    o HBDi is a non-bank lending institution and does not provide grants to for-profit businesses.
    o Nonprofits may be eligible for grants through various governmental agencies, corporations, and foundations.

  • What kinds of loans are available?

    o Fast Track Loan: $5,000 - $25,000, processed within three business days, minimal application requirements.
    o Micro-Enterprise Loan: $5,000 - $50,000 for start-ups and businesses in the early stages.
    o Small Business Tandem Loans: $50,000 - $250,000, bridging the gap between bank financing and other sources.

  • How can loan proceeds be used?

    Loan proceeds can be used for:
    o Working capital
    o Business Acquisition
    o Equipment, furniture, and fixtures
    o Land and building

  • What are the loan terms, interest rates, and fees?

    o Terms range from 1 to 30 years based on the asset's useful life.
    o Interest rates are determined case-by-case, with fixed, below-market rates available (as low as 5%).
    o Application fees: $350 for Fast Track Loan, $75 for Micro-Enterprise Loan, and $250 for Tandem Loans.
    o Micro and Tandem Loans also incur a 1% origination fee and attorney fees for closing documents.

  • What are the eligibility requirements?

    To be eligible for an HBDi loan, businesses must:
    o Be legally established and located in Houston.
    o Have a satisfactory credit history and demonstrate personal character.
    o Maintain a sound financial position and provide reasonable personal support.
    o Show assurance of repayment based on past and projected earnings.
    o Meet job creation goals for Micro and Tandem loans.
    o Fast Track applicants must have a minimum credit score of 600 and locate the business in a low-income neighborhood.

  • How can I apply for a loan?

    o Submit an online application or deliver a completed application with supporting documents to HBDi.
    o Required documents include financial statements, personal financial statements, resumes of principals, debt obligations, collateral details, and a business background description.

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