The Tyler Small Business Development Center (SBDC), located at TJC West, recently launched a new tool to help local entrepreneurs access capital to start or grow a business.
These Capital Acquisition Plans match each business with their appropriate type of capital, based upon the specifics of the business and preferences of owners.
To increase awareness of these resources, the Tyler SBDC will offer two free, one-hour workshops, “Accessing Capital to Start & Grow a Business.” The sessions are set for 6 p.m. Tuesday, June 26, at the Tyler Innovation Pipeline, located at 217 E. Oakwood St., and 10 a.m. Saturday, July 7, at the Tyler Public Library, located at 201 S. College Ave.
According to the U.S. Small Business Administration (SBA), a key concern for most small businesses is access to capital. However, as is obvious by driving through Tyler, there isn’t a shortage of lenders, banks and credit unions.
Money is available but most small business owners frequently don’t understand the options available for capital and often don’t meet the underwriting requirements. Thus, lenders and borrowers often fail to connect, resulting in missed opportunities for new business starts and job creation.
The Capital Acquisition Plan, a free service offered by the SBDC, reconciles the client’s circumstances with available sources of capital using the Three Tranche Model of Capitalization. This results in funding solutions for nearly any business regardless of the personal credit of the owner, time in business, or other common barriers from accessing capital. Options exist for pre-launch and start-ups needing some seed capital of $500 to $35,000 to get started all the way up to loans of five million dollars or more.
To date, the Tyler SBDC has helped area clients access over $200 million.
Tranche 1, commonly referred to as Seed Capital, is often accessed within 30 days with no minimum personal credit scores required. Sole proprietorships and DBAs may qualify. Pre-launch and start-ups can qualify and funding amounts are $500 to $35,000 with the average loan being $20,000.
Tranche 2 is in the form of business credit which is based only on the Employer Identification Number of the business without the use of the owner’s Social Security Number or personal credit. The SBDC has expertise in helping clients leverage this poorly understood and underutilized source of capital. However, it is necessary to have an LLC, C-corp, or S-corp to build business credit as sole proprietors and dbas will not meet the underwriting requirements.
Tranche 3 has long been the wheelhouse of the Tyler SBDC. These business loans and lines of credit typically require business plans, financial projections, and more documentation to obtain but can provide access to millions of dollars.
The SBDC staff assists in all aspects of helping small business owners become loan-ready.
About the Tyler SBDC
The Tyler SBDC is a partnership program working with the U.S. SBA, the State of Texas and TJC, to provide small businesses with the practical assistance needed to survive, grow and prosper in the seven-county service area of Smith, Wood, Cherokee, Nacogdoches, Shelby, Sabine and San Augustine.
The Tyler SBDC helps small businesses start and grow through the following services:
• Creation of business plans
• Business and industry research
• Access to funding from $500 to $5,000,000+
The Tyler SBDC team is composed of professionals passionate about small business including an MBA with prior “Big 4” consulting experience, a former banker with more than 40 years of business lending experience, and a director who has provided our SBDC leadership and excellence for over 22 years.
For more information, go to www.TylerSBDC.com.