Fund your Oregon business

When your own money isn’t enough, start with a no-cost advisor, then ask which program actually lends. Business Oregon is the state’s economic development agency. One of its funds lends to the business. Two others sit with a bank. Regular SBA loans come from a lender.

What’s different in Oregon

• One-on-one advising is no-cost. The Oregon SBDC says its advising is no-cost and confidential¹. Make an appointment.
• One state fund lends directly. The Entrepreneurial Development Loan Fund does not send every reader to a bank. Its lifetime cap is $1,000,000², and you have to meet one of its eligibility tests.
• The named grant is narrow. It is up to $75,000⁶, paired with private financing, for a business that already has Oregon sales. It is not a check for opening day.
• Two SBA offices split the state. Portland covers 30 counties. Six eastern counties use Boise.

Do this

1. Write down what you need and what it’s for. Equipment, inventory, a building, and rent are different asks. The direct loan’s specifications allow equipment, software, furniture, fixtures, real estate, or working capital. They also require at least 15 percent of the project proceeds used for working capital and equipment, or 10 percent for real estate, and an unlimited personal guarantee from each person with at least 20 percent ownership³.
2. Book no-cost advising. The Oregon SBDC advising page says the advising is no-cost and confidential¹. Workshops and other training are not in that sentence.* Ask the center what a class costs before you sign up. The direct state loan also requires counseling through a certified entity, and the loan page says there is no fee for that counseling.
3. Use the SBA office for your county. The Portland District Office in Portland offers funding programs, counseling, federal contracting certifications, and disaster recovery. It serves Benton, Clackamas, Clatsop, Columbia, Coos, Crook, Curry, Deschutes, Douglas, Gilliam, Hood River, Jackson, Jefferson, Josephine, Klamath, Lake, Lane, Lincoln, Linn, Marion, Morrow, Multnomah, Polk, Sherman, Tillamook, Umatilla, Wasco, Washington, Wheeler, and Yamhill⁸. If you are in Baker, Grant, Harney, Malheur, Union, and Wallowa, use the Boise District Office⁹.
4. Understand who lends the regular SBA loans. 7(a) and the other ordinary SBA loans come from participating lenders, not the SBA. The SBA loans guide explains who makes each kind.
5. Read the direct loan before you assume a bank has to be involved. The Entrepreneurial Development Loan Fund provides direct loans to help start-ups, micro-enterprises, and small businesses expand or get established. You qualify by meeting one of these: revenue of $1,500,000 or less in the prior 12 months, or 25 or fewer full-time-equivalent employees, or at least 50 percent ownership by a person classified as severely disabled. The employee test is 25 or fewer full-time-equivalent employees. The lifetime maximum is $1,000,000. The term is generally not longer than the useful life of the assets, and not more than 10 years. The rate is a fixed rate of prime plus 2 percent, at a minimum. The specifications also require at least 15 percent of the project proceeds used for working capital and equipment, or 10 percent for real estate, and an unlimited personal guarantee from each person with at least 20 percent ownership³. There is no application fee to the fund, and no fee to work with an SBDC or other certified entity. Third-party fees may still apply. You have to be enrolled in small-business counseling through a certified entity, and you need collateral.² Collateral counts at less than its value. The program specifications list the advance rate for equipment and for real estate. Read the program documents before you apply.
6. If you are in manufacturing, processing, or distribution, read the gap-financing fund. The Oregon Business Development Fund is gap financing alongside a traditional lender, for land, buildings, equipment, machinery, and permanent working capital. An applicant must typically be a traded-sector business in manufacturing, processing, or distribution that creates or keeps jobs. The program prefers rural and distressed areas and businesses with fewer than 100 employees. You need a commitment to lend from a qualified private financial partner or an economic development organization. The maximum is $2,000,000. The rate is U.S. Treasury bills plus 1 percent, with a 4 percent minimum. There is a $200 application fee and a 1.5%⁴ origination fee.
7. The Credit Enhancement Fund is insurance for the lender. That page says it is loan insurance for lenders, not a loan you apply for yourself. The lender submits the application. Business Oregon does not take it from the business. Insurance is typically up to 80% of a term loan, with exposure up to $6,000,000⁵. You still apply to the lender. The lender decides whether to ask for the insurance.
8. Read the grant page the same way. The Small Business Sustainability Fund describes grants of up to $75,000, for small businesses, with priority for rural or underrepresented businesses, and for projects that show a public benefit and either increase out-of-state sales or matter to the rural community. Uses include tenant and capital improvements, equipment, inventory and accounts receivable, and working capital such as employee training⁶. The program guidelines limit it to a for-profit business that has operated in Oregon with sales revenue for at least one year, with less than $3 million in annual sales and 30 or fewer full-time-equivalent employees. Applications are accepted on an ongoing basis while funding remains available, through your Regional Development Officer⁷. Do not treat the grant as startup cash for every new business. Be wary of anyone selling access to a guaranteed grant.
9. Keep your paperwork ready. Lenders and Business Oregon ask for your formation documents and EIN. Register your business and Get your tax IDs are the steps that produce them.
10. After a declared disaster, the SBA can lend directly. Disaster assistance covers several kinds of loan, including physical damage, economic injury, and military reservist economic injury, for a declared disaster, and only if you qualify¹⁰. A disaster by itself does not qualify you. Check the declaration and the loan type before you apply.

What you get back

An appointment with an advisor, and help preparing what a lender or Business Oregon asks for. A loan decision comes only if you qualify, from Business Oregon on the direct program or from a lender on the others. These pages do not promise a finished plan or an approval.