Loans

Allies for Community Business offers term loans and lines of credit between $500 and $100,000 to early, emerging, and established businesses in Illinois and Indiana. As we approach the upcoming holidays and due to a very high volume of loan applications, any new applications submitted after December 1 will be processed in early January. Thank you for your understanding and we look forward to working with you.

Prepare and Apply

Look through the qualifications and requirements listed below and then apply.

Accept Our Offer

If you qualify for and accept our loan offer, we would fund your loan electronically.

Meet with an Ally

Make the most of your loan by working with one of our Community Business Allies to grow your business.

How do I qualify for a loan?

Allies for Community Business offers loans between $500 and $100,000 to early, emerging, and established businesses. We are a little different from other lenders: we do not use credit scores and do not put liens on your personal assets. Instead, we evaluate how well you have managed your debts over the past two years and how much cash you have available to make monthly loan payments to us. That’s it!

Our Loan Options

For loan requests between $500 and $25,000

STEP 1 : Credit Report

When you apply for a $25,000 loan or less, we would first pull your credit report to check the following:

  • Over the past 24 months, have you avoided bankruptcy and collections larger than $500?
  • For at least the last 12 months, have you been paying on one or more open credit lines and did you make all of your payments on time?
  • Today, do you have at least 25% available to borrow on all open revolving credit lines?

If the answer to all of the above is Yes, congratulations! You are preliminarily approved for a loan. We then calculate our loan offer for you. We will offer 1.5 times the largest amount you have borrowed over the last 12 months (excluding student loans) and are successfully repaying, or $25,000, whichever is less.

If you accept our loan offer, we would move to verify your identity, then to close and fund your loan. We will require you to personally guarantee the loan and will file a UCC lien to communicate to other lenders that we have an interest in the business. If we find any issues with our verification steps we reserve the right to withdraw our offer.

We also encourage you to schedule the first of your free coaching sessions with one of our Community Business Allies!

 

STEP 2 : Financial Statements

If over the past 24 months you have been in bankruptcy or have been assessed a debt collection larger than $500, or if over the last 12 months you have been late on three or more payments, we will speak with you about a Credit Builder loan up to $2,500 that will help you prepare for larger loans in the future. Skip to Step 3 for details.

If you have not been in bankruptcy, been assessed a debt collection larger than $500, nor had three or more late payments in the last 12 months, but over the past 12 months you:

  • have had one or two late payments, or
  • right now you have less than 25% available on an existing credit line, or
  • your largest trade line is not large enough to meet your loan request

 

You will choose one of the following three ways to provide us with further details on your financials.

Option A:

When you apply for a $25,000 loan or less, the best way to apply for a loan from us is to share your tax returns.

We will then calculate your debt service coverage (DSC) ratio, which we use to evaluate whether you are likely to be able to repay our loan. If your debt service coverage ratio is at least 1.25, congratulations! You are preliminarily approved for a loan.

Option B:

When you apply for a $25,000 loan or less, if your business is too new to provide business tax returns or if you prefer you can share your bank statements.

We will then calculate your debt to income (DTI) ratio, which we use to evaluate whether you are likely to be able to repay our loan. If your debt to income ratio is no more than .35 and you have three or fewer insufficient fund (NSF) fees per month on average, congratulations! You are preliminarily approved for a loan.

Option C:

When you apply for a $12,500 loan or less, if your business is too new to provide business tax returns you can share your financial statements with us.

If your debt service coverage ratio is more than 1.25 and your debt to income ratio is no more than .35, congratulations! You are preliminarily approved for a loan.

If you accept our loan offer, we would move to verify your identity and existing debts, then to close and fund your loan. We will require you to personally guarantee the loan and will file a UCC lien to communicate to other lenders that we have an interest in the business. If we find any issues with our verification steps we reserve the right to withdraw our offer.

We also encourage you to schedule the first of your free coaching sessions with one of our Community Business Allies!

 

STEP 3 : Credit Builder

If you do not qualify for the loan you have requested based on the above, that’s OK! We can still provide you with a starter loan to help you improve your credit and cash flow. We call this loan a Credit Builder. Our standard term is 12 months.

Provided that you are current on your open trade lines, we will review your last three personal and business bank statements to ensure there are three or fewer insufficient funds (NSF) fees per month on average and that your most recent month’s statements end with a positive balance.

If we are able to verify these conditions are true, we will then calculate your current debt capacity (CDC) ratio, which is a calculation we use to evaluate whether you are likely to be able to repay our loan.

We will offer you the largest loan amount (capped at $2,500) at which your CDC ratio equals at least 1.25. If you requested less than that, we will offer you the loan amount you requested.

If you have been in business for less than six months, or if your CDC ratio is less than 1.25, we invite you to schedule a session with one of our Community Business Allies to talk through how we can help you create the following:

  • Create a business plan
  • Create financial projections
  • Establish your legal structure
  • Establish a business bank account
  • Establish online bookkeeping
  • Analyze your capital needs

When you have completed this work, we will offer you a $500 starter loan to help you build your business and your credit. We will then continue to work with you over time to grow your business further and access additional funds.

If you accept our loan offer, we will move to verify your identity, then to close and fund your loan. We will require you to personally guarantee the loan and will file a UCC lien on business assets to communicate to other lenders that we have an interest in the business. If we find any issues during our verification steps, we reserve the right to withdraw our offer.

We also encourage you to schedule the first of your free coaching sessions with one of our Community Business Allies!

For loan requests between $25,000 and $100,000

STEP 1 : Credit Report

When you apply for a loan between $25,000 and $100,000, we would first pull your credit report to check the following:

  • Over the past 24 months, have you avoided bankruptcy and collections larger than $500?
  • For at least the last 12 months, have you been paying on one or more open credit lines and did you make all of your payments on time?
  • Today, do you have at least 25% available to borrow on all open revolving credit lines?


STEP 2 : Financial Statements

If the answer to all of the above is Yes, we would then ask you to share your tax returns, bank statements, and financial statements with us.

We will then calculate your debt service coverage (DSC) ratio, which we use to evaluate whether you are likely to be able to repay our loan. If your debt service coverage ratio is at least 1.25, you have met the tax return requirement for your loan request.

We will then calculate your debt to income (DTI) ratio, which is a ratio we use to evaluate whether you are likely to be able to repay our loan. If your debt to income ratio is no more than .35 and you have three or fewer insufficient fund (NSF) fees per month on average, you have met the bank statement requirement for your loan request.

We will then calculate the DSC and DTI again using your financial statements. If your debt service coverage ratio is more than 1.25 and your debt to income ratio is no more than .35, you have met the financial statement requirements for your loan request.

If you accept our loan offer, we would move to verify your identity and existing debts, then to close and fund your loan. We will require you to personally guarantee the loan and will file a UCC lien to communicate to other lenders that we have an interest in the business. If we find any issues with our verification steps we reserve the right to withdraw our offer.

We also encourage you to schedule the first of your free coaching sessions with one of our Community Business Allies!

If you are unable to meet these criteria based on the loan term we offer, you may have the option to seek a longer term via the SBA Community Advantage program. Because this option includes additional requirements and stipulations, a Community Business Ally will help you navigate this process.

Terms and policies

We are currently offering a special, discounted 3% interest rate for all eligible applicants. This offer only applies to loan applications initiated after June 28, 2021. Refinances do not qualify and all applications are subject to A4CB standard underwriting and application review. This is a limited time offer so apply today!

We charge 9% in interest and 1% in closing fees which means your annual percentage rate (APR) will be approximately 10%, depending on whether you pay your closing fee up front or over time. Our standard term is 24 months. We offer free coaching to anyone who wants to work with us to start and grow a business, regardless of whether you borrow from us.

We make borrowing simple, transparent, and efficient.


Frequently Asked Questions

What businesses are eligible for a loan?

We serve businesses located in Illinois or Indiana, as well as entrepreneurs who live in these states and operate home-based or online businesses. We serve businesses who operate using a federal Employer Identification Number (EIN), a Social Security number, or an Individual Taxpayer Identification Number (ITIN). We lend to businesses operating in all industries except for the following:

  • 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
  • Speculative businesses or real estate held for investment or as passive income
How much can I borrow?

If you are approved under Step 1, we will calculate your offer as follows: We will offer 1.5 times the largest amount you have borrowed over the last 12 months (excluding student loans) and are successfully repaying, or $25,000, whichever is less. If you are approved under Step 2, your loan size will be calculated based on DSC and DTI requirements explained below.

How long is your standard loan term?

The standard term for our loans is 24 months. The term can be extended upon request and approval by our team. We will offer you shorter term options if the calculations above show that you can afford a higher monthly payment. We do this because the shorter the term the less interest you will pay over the life of the loan, and we want to save you money if you have this option.

When do I need a co-borrower?

Anyone with an ownership stake in the business may apply for a loan, but we will evaluate the owner(s) with the largest stake in the business as co-borrowers. All owners with at least a 20% stake must sign for the loan, even if they aren’t the applicant or the majority owner.

How do you calculate the debt to income (DTI)?

To calculate your DTI, we will:

  1. Combine your recurring debt payments with the loan payment you would make to us each month,
  2. Calculate your recurring income, and
  3. Divide the result of #1 by the result of #2
How do you calculate debt service coverage (DSC) ratio?

To calculate your DSC ratio, we will:

  1. Combine your after-tax income from your business return with 80% of your adjusted gross income on your personal return,
  2. Combine your existing debt with your requested new loan from us, and
  3. Divide the result of #1 by the result of #2.
How do you calculate the current debt capacity (CDC) ratio?

To calculate your CDC, we will:

  • Add up the ending cash balances over the past three months from your personal and business bank statements to determine your unused current debt capacity,
  • Divide the result by 3 to calculate your average monthly net balance, and
  • Subtract the monthly payment amount of your potential A4CB loan from your average monthly net balance to calculate your current debt capacity

Allies for Community Business reserves the right to exclude from our calculations a deposit based on the originator/payor.

How can I share my tax returns?

Give us permission to retrieve your three most recent business and personal tax returns from the IRS, or upload all pages of your signed returns. At least one return must have been filed within the last 16 months.

How can I share my bank statements?

Give us permission to retrieve your last 90 days of bank statement activity via your online banking site, or upload all pages of your last three bank statements.

How can I share my financial statements?

Give us permission to retrieve your most recent Profit and Loss Statement and Balance Sheet via your online QuickBooks account.

What are the steps after the loan approval?

After you have been approved for a loan, we will ask you to fill out a short questionnaire to help us determine the most efficient way to fund your loan. Based on your answers, we will ask you to provide the final documents we need to fund your loan. Once you have provided this information, we will prepare the closing documents for your loan and email the documents to you to sign. You will electronically verify your ID to sign your documents.

Once your documents are signed, we will fund your loan and process it with our loan servicer, Community Reinvestment Funds, USA (CRF). You will have the ability to set up an online account with CRF to have 24-hour access to your account and the ability to make payments online.

A Community Business Ally will be available throughout the life of your loan to answer any questions you may have and to provide free coaching as you grow your business.

What additional requirements must I meet to borrow again?

If you successfully repay your loan with us, in order to qualify for subsequent loans from Allies for Community Business you will be required to have formalized financials in place for at least one quarter (three months) prior to applying. You will need to use an established accounting software system such as QuickBooks or Wave. We encourage you to reach out to one of our Community Business Allies to assist you.

How do you assist City of Chicago Neighborhood Opportunity Fund provisional awardees?
  1. Any entrepreneur interested in borrowing between $500 and $100K should apply using the process described on this Loans page. If the applicant qualifies under our normal underwriting criteria through Step 1, 2, or 3 then A4CB will fund that loan.
  2. If an entrepreneur does not qualify for the loan amount they seek, but the applicant provides a conditional grant award notice from the City of Chicago through the Neighborhood Opportunity Fund program, then A4CB will underwrite this loan application using our NOF criteria. Those criteria will be applied as follows:
    • If the applicant is seeking to gap finance the amount of the project that the NOF grant does not cover:
      • Underwriting will seek evidence that the applicant has already secured the necessary funds for the project that the grant award would not cover.
      • Once verified, A4CB will seek a letter of direction from the City of Chicago such that the A4CB loan will be paid off via NOF grant funds.
      • A4CB will then fund the loan in the amount of the grant award up to $100K, inclusive of the base grant and any Build Community Wealth bonuses.
    • If the applicant is seeking to front fund a grant award and needs no other funds for the project:
      • A4CB will underwrite the loan as though the applicant has already received the grant amount that the City has provisionally awarded, thereby significantly increasing the applicant’s cash on hand for the purpose of our underwriting calculations.
      • If that adjustment improves the Debt Service Coverage and Debt to Income ratios such that the loan now meets A4CB credit policy, A4CB will fund the loan.
      • If the application still does not meet A4CB’s credit policy, A4CB will deny the loan and offer free coaching to the applicant.
    • If the applicant is seeking to front fund a grant award and to gap finance the remainder of the program:
      • A4CB will underwrite the portion of the loan that would cover gap financing as though the applicant has already received the grant amount that the City has provisionally awarded, thereby significantly increasing the applicant’s cash on hand for the purpose of our underwriting calculations.
      • If that adjustment improves the Debt Service Coverage and Debt to Income ratios such that the loan request now meets A4CB credit policy, A4CB will fund the gap financing loan and, separately in a second loan, the front funding loan. A4CB will seek a letter of direction from the City of Chicago such that the front funding loan will be paid off via NOF grant funds.
      • If the application for gap financing still does not meet A4CB’s credit policy, A4CB will deny the gap financing loan and offer free coaching to the applicant.
      • If, at a later time, the applicant seeks front funding for the grant, Underwriting will seek evidence that the applicant has now secured from elsewhere the necessary funds for the project that the grant award would not cover.
      • Once verified, A4CB seek a letter of direction from the City of Chicago such that the A4CB loan will be paid off via NOF grant funds.
      • A4CB will then fund the loan in the amount of the grant award up to $100K, inclusive of the base grant and any Build Community Wealth bonuses.
  3. A4CB will offer free coaching to help any entrepreneur with their business or their project, regardless of whether an entrepreneur needs our capital or is qualified to borrow from us.

Allies for Community Business seeks to build long-term relationships with entrepreneurs who value our services. Our core values are accountability, collaboration, respect, and passion, which we will embody in everything we do. We reserve the right to withdraw our services if business owners use aggressive, abusive, or unprofessional behavior with our staff.

  • ArePA George Juan Betancourt
    We received our small business loan right at the perfect time.
    Read Story ›
  • Eating to Live David Fuller
    Getting a Credit Builder loan with A4CB was that first initial step to getting my personal credit together
    Read Story ›
  • Brewpoint Coffee Melissa Villanueva
    Allies for Community Business tried to accommodate us to make sure that we got what we needed
    Read Story ›

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