The Community Micro Financing Loan Program
Question: What is the Community Micro Financing Loan program?
Answer: It is an economic development program to provide loans from $500-10,000 to low and moderate income persons in Knoxville and the surrounding East Tennessee area in order to create and expand businesses in this community..

Question: For what purposes can the loans be used?
Answer: The loans can be used for any legitimate business purposes. The maximum repayment period for loans is six years.

Question: What are the criteria used in considering a loan request?
Answer: The minimum criteria include: the applicant must be at least 21 years old, must be the business owner or co-owner or aspiring business owner and the loan must be for a business purpose. In addition, it is expected that an applicant will present appropriate collateral to support the loan, copies of personal and business bank statements, a completed loan application, business references and a business plan. Additional documents may be requested after review of your application.

Question: What happens after my loan application is complete? Who approves loans?
Answer: Loan decisions are made by the Urban League Loan Committee. The Committee meets on a regular basis.

Question: What factors are considered in approving a loan request?
Answer: The Loan committee considers applicants on seven factors: character, loan purpose, cash flow from the business, your business experience, your credit history, your collateral and a sense that the business would have a positive impact on the economic life of the community.

Question: Are there businesses that are not eligible to receive a loan?
Answer: Yes – there are businesses that cannot be funded. Some of the businesses that are not eligible include: liquor stores, gaming facilities, pawn shops, illegal businesses, sexually oriented businesses, and so on.

Question: Will my credit score be used?
Answer: Yes, we do consider you credit score as part of the application process. However, we consider your credit history within the context of your whole application and personal financial and business history. We do not base our decision on a single credit score.

Question: What interest rates and fees are involved?
Answer: The normal interest rates on loans are Prime plus 2-6%, with a maximum loan amount of $10,000. If a loan is approved, a service fee of the higher of 5% of the loan amount or $50 will be charged. These fees can be financed along with the approved loan amount. Late payments will be assessed 10% of the past due amount. There is no penalty for pre-payment of a loan.


Question: Is my information secure?
Answer: Yes --- all members of the Urban League staff involved with the loan program and all loan committee members sign a confidentiality statement. Files are locked in a secure location.

Question: What is the source of funds for this loan program?
Answer: The Urban League has a contract with the Tennessee Valley Authority to manage this loan program. The Urban League and the TVA have a joint interest in this economic development project to create and expand business opportunities for socially and economically disadvantaged persons in the greater Knoxville area.

Question: What programs are available at the Urban League to assist me with personal finance and other financial matters that might assist me in my business?
Answer: The Knoxville Area Urban League offers a number of workshops and seminars throughout the year on economic empowerment including workshops on buying a house; workshops on the responsible use of credit; classes on personal finance, investing and entrepreneurship/small business management. In addition, the Urban League is a clearinghouse for small business on where to find resources to help them develop their businesses.

Question: Does the Knoxville Area Urban League offer other loan programs to small business people?
Answer: Yes. We offer the EZ small business loan program for residents of the Empowerment Zone and others who want to start or expand a business in the EZ; and a bridge loan program for minority contractors.


For additional information contact the Knoxville Area Urban League.
Phone: 524-5511
Email: info@thekaul.org