FAQ

North Edge serves businesses in the counties of Del Norte, Humboldt, Lake, Mendocino, Trinity, Siskiyou, and sometimes Shasta. If the business is located outside of these counties, it is not eligible at this time. We lend to businesses operating in most industries, but not the following: Speculative businesses or real estate held for investment or as passive income. Lenders and quasi-financial institutions (e.g., pay day lenders, pawn shops, auto title loans, mortgage lenders, check cashers, money transfer services, etc.) Businesses engaged in illegal activities or the sale, distribution, or manufacture of firearms, pornography, or marijuana. Businesses which present live performances of a prurient sexual nature or derive—directly or indirectly—more than 5% of their gross revenues through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature. Businesses deriving more than one-third of gross annual revenue from legal gambling activities. Private clubs and businesses which limit membership for reasons other than capacity. Businesses principally engaged in teaching, instructing, counseling, or indoctrinating religion or religious beliefs, whether in a religious or secular setting. Government-owned entities (except for businesses owned or controlled by a Native American tribe). Businesses primarily engaged in political or lobbying activities.

Collect or prepare the following information: Personal: 3 years of personal tax returns for each borrower 3 most current bank statements Personal financial statement Resume New Business or expansion of existing business: Business plan Income and expense projections Draft lease agreement for location - if applicable Draft purchase agreement - if applicable List of available collateral Borrower injection Existing Business Information: 3 years of tax returns Current Balance Sheet Current Profit and Loss statement Lease or property ownership information List of available collateral All applicable licenses/permits Organization documentation if applicable - Bylaws and Articles of Incorporation (if corporation); Operating Agreement and Articles of Organization (if LLC) Evidence of insurance

Follow this link to register and complete the pre-application - https://aedc.portfol.com/Workflow/. Our team will review your submission and provide you with next steps.

1. Pre-Application Once the pre-application is accepted, the applicant will be able to access the full application with the same registration information created for the pre-application. 2. Application Fill out the forms as completely as possible and upload any relevant documentation. Submit the application along with the application fee of $50.00. The link for the application fee is sent via email. 3. Underwriting Once the application has been submitted and the application fee has been paid, the file is in underwriting. The underwriter will initiate a “hard pull” of your credit report, and review your application information. More information may be required on a case-by-case basis. The more complete your application package is, the fewer questions the underwriter will have, and the quicker the process will be. 4. Approval The underwriter submits the complete file for approval. If the loan amount is over $100,000 the full loan committee will review and approve or deny the application. If the loan amount is over $200,000 the full loan committee and board will review and approve or deny the application. 5. Closing Once all required approvals have been granted, loan documentation will be prepared and signed. Any conditions of approval must be addressed before funds will be disbursed. 6. Disbursement Once closing is complete, a loan draw request is submitted. All loan draws must be accompanied by an invoice for direct payment to vendor(s) or by paid invoices for reimbursement. Exceptions will be made on a case-by-case basis by North Edge. If the loan involves construction or leasehold improvements, North Edge will monitor the progress and disburse as the work is completed. 7. Servicing The loans are serviced by North Edge. The Loan Support Specialist will send invoices, perform site visits, collect regular financial updates, and offer support.

Loan proceeds must be used exclusively for business purposes including: Commercial real estate (acquisition, construction, renovation, refinance, etc.) Equipment Furniture and fixtures Inventory Leasehold improvements Refinancing subject business loan/debt Vehicles (for business use) Working capital

The loan process varies widely depending on the type of loan and project. It can take several weeks from the time a completed application package is submitted. Some loan requests require several months to fully complete and fund. However, on a case-by-case basis, some loans can be processed in less than 30 days.

Loan terms depend upon the project and the use of funds: Commercial real estate: can be typically around 25 years. Equipment, inventory, working capital and other startup costs: can be typically between 7 to 10 years.

Rates can vary. SBA 504 rates change each month, the current rate will be posted on the front page of the website. Other commercial business loans can range from 7%-10% depending on the project. Rates are almost always fixed, not variable. This means that once a rate has been determined, it will stay the same throughout the life of the loan.

All owners with at least 20% ownership must guarantee the loan, even if they aren’t the applicant or the majority owner.

Collateral is an asset that a borrower pledges to a lender to secure a loan. The more collateral available, the more secure the loan is, from the perspective of the lender. Not all borrowers are required to provide collateral, but if it is available, it will be requested.

North Edge will typically require collateral to secure the loan. However, on a case by case basis, North Edge may consider an unsecured loan (no collateral) and mitigate the risk using one of our Guaranteed Loan Programs, such as SBA 7a Guaranteed Loan Program, IBank Guaranteed Loan Program, or BIA Guaranteed Loan Program.

A borrower injection, or equity injection, is a lump sum of money or an asset invested into the business. Sources of borrower injection can include: Cash from personal savings Gift from friends or family Loan - must be subordinated (no payments for a period of time)

A borrower injection is typically required for a business startup, and can be from 10-20% of the project cost.

Our loan amounts can range from $5,000 to 5 million.

At this time, North Edge does not offer Lines of Credit. Each dollar must be “given a job”. This means that the funds need to be allocated to specific purposes, and all uses of funds will be verified by receipts.

North Edge does not have a minimum credit score in order to be eligible for a loan. In your application, make sure to explain your “credit story”. For example, if there are late payments, give the reason for the late payments and explain the steps taken to ensure no further late payments will be made in the future. If any debts are currently in collections, the accounts will need to be brought current before proceeding with the loan application process.

Some examples include: Federal debt currently in default Failure to make child support payments Currently incarcerated Not authorized to work in the US

All loan draws must be accompanied by an invoice for direct payment to vendor(s) or by paid invoices for reimbursement. Exceptions will be made on a case-by-case basis by North Edge. If the loan involves construction or leasehold improvements, North Edge will monitor the progress and disburse in sections as the work is completed.

To calculate your DTI, we will: Combine your recurring business debt payments with the loan payment you would make to us each month, Calculate your recurring income or projected income, and Divide the first bullet point above by the second bullet point above.

Our local Small Business Development Center (SBDC) is available for free technical assistance. To become a North Coast SBDC client, sign up at northcoastsbdc.org/join. Make sure to mention you were referred by North Edge when you have your new client interview.