Lending

The Mountain Association supports small business owners, nonprofit leaders and local governments with loans, as well as a variety of other services, including business support and energy services. We serve the 54 Appalachian counties of Kentucky, and we have offices in Berea, Prestonsburg, and Hazard.

Because we are a Community Development Financial Institution and a nonprofit – not a bank – we can lend to those who would not be able to get a business loan with a traditional lender. Unlike most lenders, we offer flexible payment schedules, and we can pay for all or a portion of a project to help your business or organization succeed – from website development to professional photography, and more. Our energy team can also help facilitate energy efficiency upgrades and renewable energy installations in order for you to save money on utility bills.

We do not offer grants or personal loans. We only provide loans for businesses or organizations.

Interest rates vary, and are based on a risk assessment of each loan as it’s considered. Our loans range from $1,000 to 1,000,000 and up. Interest rates typically range from 5 to 7.75% with flexible terms, depending on the loan purpose, amount and type of business. Please note for loans specifically for solar installations, we offer 4% fixed interest with up to a 20 year term. For loans for energy efficiency upgrades, like a new HVAC for example, we can offer 2.5% fixed interest.

Terms range from one to 20 years, depending on use of proceeds. Loans are usually collateralized and typically require personal guarantees and/or key person insurance.

We consider the community impact, repayment risk, type of business, experience of the entrepreneur, credit score of the owners (though please don’t let a low credit score deter you from applying- see below for more details!), and purpose of the loan. If the business is just getting started, we consider the business idea. If the business is an existing business, we consider the business history.

Many of our borrowers have credit scores that disqualify them from getting a traditional bank loan. We look at a variety of factors when deciding on a loan. Though we consider credit score, we also consider your experience as a business owner or entrepreneur, community impact, what you are investing in the business, the business’ financials (if an existing business) and projections, purpose of the loan, and risk. Additionally, we have an option for using your ability to crowdfund as the main criteria for approval. Through these “CrowdMatch Loans,” a credit check is not required.

Learn more about improving your credit score here.

Once we have all the information we need, decisions for loans under $50,000 are typically made within 2-10 business days. Larger loans have a longer processing time as loans larger than $50,000 must be approved by our loan committee. For these larger loans, after we have received your application and all of the necessary information, a staff member will create the loan proposal and present it to the committee. (The committee generally meets monthly. It can take up to as long as six weeks to get an answer on an approval or denial for these larger loans.)

We charge an interest rate to help cover our costs, which can include individual coaching and consulting to clients, salaries, overhead, and the interest we must pay on the borrowed money that we re-lend.

The information we need varies depending on the size of the loan and the length of time the business has existed. At a minimum, we need the completed and signed loan application. For businesses that are just getting started, we often need a business plan. If you do not have a business plan, please find resources here to learn how to create one. For existing businesses, we often need financials and personal income tax statements for the last three years.

This short video provides more details on the above items and what else you will need to provide during the loan application process: https://www.youtube.com/watch?v=eVjvFrdMPeM

Please contact a staff member with any questions.

Venturize is a nonprofit that offers unbiased information about business lending. Their website and glossary can answer questions about different types of loans and lending institutions.

This short video provides more details on start-up business loans and tips on what you should do before you apply: https://www.youtube.com/watch?v=eVjvFrdMPeM

You can also find more resources on our Business Support page for tips on starting your business.