Tennessee Department of Economic & Community Development - Business Services: Financial Assistance

One of the biggest problems in starting your own business is identifying the amount and source of funding necessary to carry out your plan . . . and to do it right.

A variety of state and federal programs exist to support economic development, and Tennessee is no exception. Tennessee wants you to be successful and will work with you to achieve the results you want.

You should note, however, that the majority of financial assistance programs are targeted programs. That is, they are designed to bring about specific results: increased employment in rural areas, increased participation in the economy by disadvantaged individuals, etc.

Some years ago the Small Business Division conducted a study of the banking industry's attitudes toward lending to small firms. The results of the study were consistent with other indicators. The reasons banks decline credit to small businesses are (in order of importance):

Even in government assisted financing, these factors (in the same order) sink many proposals. In fact, a recent study of start-up financing for new businesses reveals that 92% of all start-ups use their own generated capital (personal assets, loans from friends and family) to begin operations. But don't give up. Be persistent and work hard to achieve your dream.

Chapter Five lists the financing programs that are available. There are several sources of funding you may consider.

If your business is a start-up, you will be expected to provide 20-30% of your own financing, utilizing your own assets. It is expected that these funds will be in the form of paid-in capital. Some business owners "loan" money to the business and carry a debit on the liabilities side of the balance sheet. Most commercial lenders frown on this practice as they feel the funds injected into the business should be classified as paid-in capital. In addition, this practice may skew the debt-to-worth-ratio, impacting a lender's credit decision. In a similar vein, some business owners list notes receivable from themselves on the asset side of the balance sheet. Most lenders discount the value of these notes.

Another source of funding is family, friends and colleagues. They may loan funds and take a promissory note or settle for stock options with a handshake. A small business can issue stock without the formal registration process if fewer than 15 people purchase the stock and stock is not offered for sale to the general public. The investors must hold the stock for their own portfolios. Information on limited issue stock can be obtained from the Tennessee Department of Commerce and Insurance. See contact list at the end of this chapter for additional information.

Commercial credit sources are an excellent source for financing when used appropriately and in appropriate amounts. The chief mistake borrowers make in requesting commercial loans is asking for too little or too much. The purpose of pro forma statements is to determine the amount of funding the enterprise will need to succeed. Asking for too little shows poor management skill to the lender. On the other hand, no lender wants to provide 100% of financing for a project. This is a high-risk position for a lender because the business owner has little to lose if the venture fails.

Credit cards are a primary source of financing, especially for small items and equipment your business might need. Because credit cards carry a higher rate of interest than conventional loans, their use should be carefully planned.

Various government-backed financing exists: some direct loans, some loan guaranties. Review this section to see if you qualify for any of these options.

The programs and organizations listed below loan money directly to you and your company for the purpose of conducting business operations.

The Community Micro-Loan Program is a peer lending program. Four to ten potential borrowers form what is called a business loan peer group. These groups receive training and support from the program. The most exciting part of the peer group is that all the members help each other succeed. Members help each other develop business plans, approve loans and most importantly, monitor the loan repayments. The program is committed to helping you establish credit, repair credit, and qualify for a business loan.

Eligible Businesses. Loan funds are available to residents living in the following counties: Knox, Anderson, Blount, Roane, Monroe, Jefferson, Sevier and Loudon. The residents must be low to moderate income individuals who are at least 18 years of age.

Membership Process. To become a member of a business loan peer group, you must meet the eligible business requirements listed above and do the following:

The U.S. SBA Micro-Loan Program assists small business which need small amounts of financial assistance. Under this program, SBA makes direct and guaranteed loans to Intermediaries who use the proceeds to make micro-loans to eligible borrowers. A list of intermediaries is located at the end of this chapter.

Eligible Businesses. For the purpose of this program, virtually any type of for-profit small business is eligible as long as the business meets SBA's criteria for a small business.

Eligible Activities. Micro-Loan funds may be used for working capital or to purchase inventory, supplies, furniture, fixtures, machinery and equipment.

Funding. The maximum loan a small business may receive is $25,000 and the maximum repayment term is 6 years.

The U.S. Small Business Administration's 504 Direct Loan Debenture Program is designed to stimulate job creation and to increase private sector involvement in the financing of long-term, fixed assets for small businesses. Through the pooling of projects, the SBA 504 Direct Loan Program allows a small business like yours to take advantage of the open capital markets, but avoid much of the costs associated with entry into these financial markets.

SBA maintains a current portfolio of more than $37 million. It averages $340,000 per application. When taken with the required matching private financing, each request represents $800,000 in total fixed asset and equipment financing.

Eligible Activities. The following activities are eligible for this funding: land, building or machinery and equipment acquisition, building expansion or renovation, and new construction. Certain activities are ineligible for SBA 504 loans, including refinancing of existing debt, provision of working capital, and restructuring of existing debt.

Eligible Businesses. SBA 504 loans are available to for-profit corporations, partnerships or proprietorships whose net worth does not exceed $6 million and whose average profit after tax for the past two years does not exceed $2 million. Certain companies are ineligible for SBA 504 loans, including passive investment companies, unregulated media forms, real estate investment companies, nonprofit corporations and financial institutions.

Funding. Under the SBA loan program, a company must be willing to commit to the creation of one job for each $35,000 of financing. SBA participation is limited to 40% of the total project cost, with a minimum investment of $50,000, and a maximum investment of $750,000 in urban areas and $1 million in rural areas. The 504 loan offers a 10-year or a 20-year term, depending on the useful life of the assets financed. Interest rates for the SBA loan are determined from the SBA debenture sale; the 20-year Treasury note is an indicator.

Your Costs. Costs associated with SBA 504 loans include a 3% financing fee. A monthly service fee of 1/8 of 1% of the outstanding balance of the loan is included as a part of the effective interest rate.

The Enterprise Demonstration Project is a revolving loan fund that requires a loan participation of a one-to-one match with a financial institution. The fund is administered and operated by West Tennessee Venture Capital Corporation.

Eligible Businesses. EDP is limited to only those businesses located within Tennessee.

Ineligible Investments. This program does not invest in research and development or seed capital situations, conventional agriculture, banking or insurance companies, entertainment production companies, real estate investment, natural resource extraction, and start-up projects.

Funding. This program can finance a minimum of $25,000 to a maximum of $300,000.

Maturities. As a general rule, the terms of the loan range from 48 months to 120 months with an average of 60 months.

The Tennessee Small Business Energy Loan Program is designed to assist existing businesses in the identification and installation of approved energy effeciency measures into existing Tennessee facilities, industrial processes and the operations of approved applicants.

Eligible Activities. You can use a Tennessee Small Business Energy Loan for the following energy efficiency measures: energy-efficient plant and production equipment; insulation, caulking, weather stripping, storm windows and/or doors; multi-glazed or specially coated windows and doors; automatic energy control devices and systems; energy-efficient heating and air conditioning equipment and systems components including heat pumps, furnaces, utility plant and distribution system modifications; solar heating and cooling; co-generation and energy recovery systems; energy-efficient lighting and lamps; and other measures that have documentation to show that they can save energy or reduce energy demand.

Eligible Businesses. Businesses eligible for the Tennessee Small Business Energy Loan Program must have an annual average of 300 or fewer employees, or less than $3.5 million annual gross sales or receipts (averaged over the last three years), or must be a unit of county or local government. The business must occupy or use the targeted structure in its operations, exhibit financial need and be declared financially sound and capable of pledging collateral and repaying the money that is borrowed.

Eligible Structures. To be eligible for this energy loan, a structure must be at least one year old and cannot be:

Classified as condemned, scheduled for demolition or the target of seizure through eminent domain.
Leased or rented by the applicant from another party unless the landlord has given the tenant written permission to proceed with the project.
Encumbered by a real estate sale, purchase, option or trade agreement that is scheduled to take place prior to the maturity of the loan unless:
- the current occupant/debtor agrees to retire the outstanding balance of the loan before closing the agreement;
- or the new occupant agrees to retire the outstanding indebtedness according to the terms and conditions of the originally executed loan agreement.
Included on the National Register of Historic Places, or, if included, has the approval, in writing, of the Tennessee Historical Commission to perform the work.
Used for residential end-use purposes.
Located in a wetland or special flood hazard area as designated by the Federal Emergency Management Agency.

Funding. Tennessee Small Business Energy Loans are available at an interest rate of 5% for a period of seven years or a period of time, in months, rounded to the nearest quarter of a year, which equates to the payback period of the project. The maximum loan amount is $100,000.

Application and Approval. Applications must be submitted to the Tennessee Department of Economic & Community Development's Energy Division. Completed applications are reviewed and evaluated by the Program Staff and presented to the Loan Committee. The installation phase of your project should not begin until approval is received.

Revolving Loan Funds are available through nine development districts in Tennessee. The development districts operate subsidiary community development corporations that perform the actual lending. The RLF combines funds from the Economic Development Administration and Rural Development, USDA with regional funding sources. The RLF then provides new or expanding businesses with financing at or below market rates.

Eligible Activities. Revolving Loan Funds can be used for the following: real estate acquisition, expansion, renovation and construction, acquisition of machinery and equipment, and working capital.

Eligible Businesses. RLF's are available to for-profit corporations, partnerships or proprietorships. Certain types of businesses are not eligible for RLF's, including: passive investment companies, financial institutions and real estate investment companies.

Funding. For every job created, your company is eligible for $5,000 in loans for a maximum of $100,000. Terms for RLF's are based on the life of the assets, generally up to seven years for machinery and equipment and up to fifteen years for real estate loans. Interest rates are determined by the development corporation.

Prime is accepted as published in the Money Rates section of The Wall Street Journal.

TVA Economic Development Investment Funds are designed to provide capital to finance projects that support the recruitment of new industry, the expansion of existing industry, the growth of small business and the creation of new companies in the Tennessee Valley.

TVA investment funds are designed to generate high value jobs, capital investment, new power load and a return on TVA investment. By investing in the attraction and expansion of established industry, TVA is a partner with power distributor customers to generate economic growth and opportunity from mature companies that have demonstrated the capacity for sustained growth in today's market.

The Economic Development Loan Fund (EDLF). The EDLF is a multi-million dollar revolving loan program targeted toward low-interest loans to established companies relocating or expanding their operations in the Tennessee Valley. Loans are made for buildings, plant equipment, infrastructure or property based on the capital investment leveraged, the number of jobs created, power load generated and geographic diversity. Either a power distributor, a local government or an established economic development organization must sponsor project proposals. TVA Economic Development staff members market the program, manage the loan review process and manage the loan portfolio. Primary focus: sustained growth.

Special Opportunities County Fund (SOC). The SOC fund is a $15 million revolving loan program targeted toward low-interest loans for companies expanding or relocating in the Tennessee Valley's most economically distressed counties. Loans are made for buildings, plant equipment, infrastructure, or property based on the capital investment leveraged and the number of jobs created. Only those counties with the lowest per capita personal income and highest percent of people below the poverty level are eligible for this program. TVA Economic Development staff members market the program, manage the loan review process and manage the loan portfolio. Primary focus: sustained growth.

Commerce Capital LP, a Small Business Investment Company (SBIC). TVA has invested capital and is a limited partner in Commerce Capital. Commerce Capital's $5 million equity fund leverages up to $90 million federal dollars for the operating capital needs of rapidly growing small businesses in the Tennessee Valley. These investments are made in debt and equity financing for companies in health care, manufacturing, environmental services, communications and information systems. Investments range from $500,000 to $3 million. TVA Economic Development staff members market the SBIC program to valley businesses and submit the projects for review by the Commerce Capital General Partner. A TVA representative sits on the Commerce Capital board to review investment decisions and monitor return on investment. Primary focus: initial growth.

Minority Business Development Loan Fund (MBDLF). The MBDLF is a $9 million revolving loan program targeted to socially and economically disadvantaged businesses in the Valley. Loans are made for fixed assets and working capital based on the capital investment leveraged and number of jobs created. TVA Economic Development staff members market the program, manage the loan review process and manage the loan portfolio. Primary focus: sustained growth.

SBICs are private investment and loan companies established to serve the small business market. They are funded with a combination of private and federal investment. SBIC's assist only businesses with net worth below $18 million and less than $6 million in net income in a three-year period. They may prioritize investments by type (equity or loan), dollar amount, location or industry.

The U.S. Department of Agriculture makes funds available to electric cooperatives for the purpose of making direct loans to businesses expanding or locating new operations in rural areas. Participating cooperatives can make loans totaling $450,000 to qualified borrowers for up to 10 years' maturity.

The purpose of this loan is to promote rural economic development and/or job creation projects including but not limited to project feasibility studies, start-up costs, incubator projects, and other reasonable expenses.

A project requires at least 20% funding from other sources such as owner equity , commercial markets and other government financing. Projects should result in a sustainable increase in the productivity of economic resources in rural areas and thereby lead to a higher level of income for rural citizens.

If your company is interested in this type of funding, you should contact your electric cooperative for information.

The following programs and companies extend loan guaranties as part of your firm's collateral in securing a loan from a private lender. In all cases the guaranty is only for a portion of the loan; lenders must accept some risk.

The U.S. Small Business Administration has traditionally been the primary government-backed financing program available in Tennessee. The financing consists of guaranties of varying amounts to commercial lenders. The point of contact for all SBA financing products is a commercial lender. Most banks have loan officers familiar with SBA programs. Small Business Development Centers, listed in Chapter Six, can assist in preparing your loan requests.

The following are Loan Guaranty Programs under section 7(a) of the Small Business Act:

Loan Guaranty. The 7(a) authorizes the SBA to guaranty loans to small businesses that cannot obtain financing on reasonable terms through normal lending channels. The SBA basic guaranty program generally is used to fund the varied long-term needs of small businesses. The program is designed to promote small business formation and growth by guarantying long-term loans to qualified firms. Loans are available for many business purposes such as real estate, expansion, equipment, working capital or inventory. The SBA can guaranty 75% of the loan amount up to $750,000. For loans of $100,000 or less, the guaranty rate is 80%. The interest rate cannot exceed 2.75% over the prime lending rate. Maturities are up to 7 years for working capital and up to 25 years for fixed assets.

Low Documentation Loan (LowDoc). Also a 7(a) program, the LowDoc program reduces the paperwork involved in loan requests of $150,000 or less. Under LowDoc, the SBA uses a one-page application and relies on the strength of the individual applicant's character and credit history. The applicant must first satisfy all the lender's requirements. The lender may then request a LowDoc guaranty. Loans may be used for plant and equipment, working capital and inventory. Generally, businesses employing fewer than 100 employees and whose sales average less than $5 million for the past three years can access this program

CAPLines. Another 7(a) program, CAPLines finances small businesses' short-term, cyclical working capital needs. Under CAPLines, there are five distinct short-term working capital loans: the Seasonal, Contract, Builder's Standard Asset-Based and Small Asset-Based lines. For the most part, the SBA regulations governing the 7(a) program also govern this program. Under CAPLines, the SBA generally can guaranty up to $750,000.

DELTA. The DELTA program provides both financial and technical assistance to help small defense-dependent firms that have been adversely affected by defense cuts diversify into the commercial market. Loans must be used to retain jobs of defense workers, create new jobs in impacted communities, or expand in order to remain in the national technical and industrial base. Loan proceeds may be used for working capital, acquisition of equipment, raw materials and inventory, and capital improvements that may include renovation and replacement of the applicant's physical plant. DELTA uses existing SBA programs: the 7(a) with a $1.25M maximum guaranty and/or the 504 with a $1M maximum debenture. The maximum financing available, however, is $1.25 million.

Export Working Capital Program (EWCP). Under the EWCP, the SBA guaranties up to 75% of a secured loan (80% on loans of $100,000 or less) or $750,000, whichever is less. Loan maturities may be for up to three years with annual renewals. Loans can be for single or multiple export sales and can be extended for pre-shipment working capital and post-shipment exposure coverage, or a combination of the two. Proceeds can only be used to finance export transactions.

SBA Loan Prequalification Program. Offered to armed forces veterans, minorities, women, exporters, rural small business owners and business owners in certain specialized industries, this program enables the SBA to prequalify an applicant for a 7(a) loan guaranty before the applicant goes to a bank. The maximum loan amount is $250,000. SBA-designated intermediaries can work with you to review and strengthen your loan application, aplly to the SBA, and upon approval of the application, find an interested lender. The application will focus on your character, credit, experience and reliablility rather than assets.

International Trade Loan. This loan offers long-term funds to small businesses engaged or preparing to engage in international trade, as well as those businesses adversely affected by import competition. The SBA can guaranty up to $1.25 million for a combination of fixed-asset financing and working capital. The working capital portion cannot exceed $750,000.

The following information applies to all Small Business Administration Loan Guaranty Programs:

Eligible Businesses. The following businesses are eligible for this SBA guaranty program:

Maturities. As a general rule, the following maturities and uses are followed:

Guaranty Amount Fee. The 7(a) family utilizes the following fee blended structure (current as of 1998):

Guaranty fees can be rolled into the loan, as long as the financed amount does not exceed guaranty limits. The use of SBA guarantied loans in Tennessee reflects the commercial banking industry's perception of risk. SBA guaranties are used to extend the terms of loans in order to make a good credit arrangement better. That is, a ten-year repayment has less negative impact on the cash flow of a business than a five- or seven-year repayment.

SBA maintains a loan guaranty portfolio of 2,350 borrowers totaling $307 million. While many loan applicants request amounts in the $300,000 range, 33% of all guaranties are for amounts less than $100,000. This reflects the trend of banks to use this program for larger dollar amounts rather than an SBA trend. One positive note: 65% of the portfolio is attributed to firms with fewer than 20 employees.

The U.S. Department of Agriculture, through the RBS, guaranties loans to nonfarm businesses in rural areas and in cities with less than 50,000 population. Eligible purposes include, but are not limited to: start-ups, expansions, repair or modernization, infrastructure, equipment, machinery, inventory, and working capital.

RBS has a $25 million ceiling on the projects funded. Over the last 3 years, Tennessee has approved loans totaling over $65.2 million. The Tennessee RBS currently maintains a loan portfolio in excess of $80.5 million (in addition to their re-lending program with the Development Districts and Rural Economic Development Loans with the electric cooperatives).

Interest rates, which should be usual and customary, are set by the lender. These rates may be fixed or variable.

Collateral should be sufficient to cover the loan after the lender has applied the normal discounts.

Existing businesses should be able to show a 10% tangible balance sheet equity and new start-up businesses should be able to show a 20% tangible balance sheet equity.

A fee of 2% is charged for the guaranty which can be paid by the applicant or rolled into the loan. This is a one-time up-front fee. No servicing fees are required on RBS guarantied loans.

The purpose of this program is to improve, develop, or finance businesses, industry and employment, and improve the economic and environmental climate in rural communities.

Telecommunications Assistance Program (T.A.P.) for Small and Minority-Owned Businesses

This program encourages the creation and support of small and/or minority-owned telecommunications businesses by issuing loan guaranties to banks for qualified borrowers.

Eligible Users. Its target customers include, but are not necessarily limited to, the following groups: telecommunications service providers; personal communications systems/networks; cellular telephone services; satellite telecommunications; re-sellers of local and long distance services; pay telephones; published directory services; directory assistance; operator services; beeper/pager services; answering voice mail services; telecommunications sales, manufacturing, repair and maintenance, installation; right-of-way contractors; consultants; researchers; billing and collection services; internet access providers; electronic bulletin boards and computer communications.

Eligible Businesses. For purposes of this program, a small business is a business with gross receipts of less than $4 million.

Funding. This program can issue loan guaranties up to 80% of the principal borrowed for a maximum of $400,000.

The Nashville Area Chamber of Commerce, U.S. Small Business Administration and area banks started a financing program for small businesses. ACCE$$ serves the small-business loan market and offers loans of $5,000 and up.

The program gives you the opportunity to present your business plans orally to a panel of bank loan officers. Panelists can qualify good credit risks immediately, improving your chances of obtaining a SBA quaranty. Regardless of the final decision, you can receive valuable outside appraisal of your business plans.

More than $1 million in loans were awarded in the program's first year. Chambers in Memphis and Chattanooga have initiated their own programs. See the contact list at the end of this chapter for more information.

The programs listed below can extend monies directly to, or on behalf of, your company, if eligible.

ITS provides training assistance as an incentive for new industry planning to relocate in Tennessee or for existing industry to expand business operations in Tennessee

The amount of capital investment and number of new jobs created from the investment determine the level of training assistance your company would receive. ITS funds are intended to support manufacturing and industrial-type organizations but are not limited to any one industry.

The hiring of a minimum of 25 new, full-time employees is a prerequisite for consideration of this training assistance. Assistance is limited to full-time production/technical workers only.

The Tennessee Department of Labor operates a grant program for companies desiring to upgrade their own employee safety programs.

Eligible Businesses. While there are several criteria such as size (between 5 and 500 employees) and membership in self-insured or Tennessee Worker's Comp Pool, the most important is the demonstration that there is a specific use for the grant funds that will directly benefit the employees by improving safety and health conditions in the workplace. Grants average in the $5,000 range with some greater amounts. The program is funded with the TOSHA penalties on safety violators, enabling the department to issue 100 to 150 grants annually.

The SBIR program is a highly competitive, three-phase, funded research program which provides qualified small businesses with opportunities to propose innovative ideas that meet the specific research and development needs of the Federal Government.

How the Program Works. Participating agencies (11 as of this printing) select SBIR topics for study, release SBIR solicitations, evaluate proposals and award funding agreements. Federal agencies solicit proposals from small firms to study areas of specific concern to program managers.

Amount of Grant. Phase I awards of up to $100,000 are made to support feasibility studies of agency-directed topics. Phase II awards, up to $750,000, fund development of the product, concept or study. Phase III represents private investment capital acquired by the company.

Federal research programs made 36 awards to Tennessee firms in 1996, totaling $10,361,624 in funding. This program is designed for the small research-oriented firm with proven capabilities. Only 15% of all proposals receive funding.

The Tennessee Child Care Facilities Corporation will assist in the start-up, expansion, improvement or continued operation of child care facilities through the guaranteeing of loans, the issuance of direct loans, and a corporate/community partnership grant.

TCCFC Loan Guaranty. The goal of this loan is to create and expand the number of child care slots in the state. Guaranties issued to commercial banks for new construction, leasehold improvements, working capital or equipment may total a maximum of 80% or $250,000. Standard maturities of 15-20 years on real estate and 5-10 on equipment are the norm. As of publication date, there are 14 loan guaranties totaling $1,910,725.

TCCFC Direct Loan Programs. This fund limits individual loans to a $10,000 maximum with a $100,000 loan pool. The loan is available to upgrade existing facilities to meet local and state standards. As of publication date, there are 10 loans totaling $90,188. This loan offers terms of up to five years on equipment and seven years on building renovations. The interest rate is prime.

Child Care Development Fund - Direct Loan. The goal of this loan is to create new child care spaces. This loan is available to upgrade existing facilities to meet local and state standards. This fund limits individual loans to a $25,000 maximum with a $200,000 loan pool. As of publication date, there are 14 loans totaling $277,286. This loan offers terms of up to five years on equipment and seven years on building renovations. The interest rate is prime.

Corporate/Community Partnership Grants. This grant is available to local governments and school districts in partnership with industries, businesses and/or other community groups that submit a proposal addressing specific documented child care needs in the community. The grant must be matched one-to-one by the applicant's partner. The Corporate/Community Partnership grant pool totals $200,000. As of publication date, 13 grants totaling $237,444 have been disbursed.

Economic Ventures, Inc.
P.O. Box 3550
Knoxville, TN 37927-3550
Phone: (865) 594-8762

Service Area: Anderson, Blount, Campbell, Carter, Claiborne, Cocke, Grainger, Greene, Hamblen, Hancock, Hawkins, Jefferson, Johnson, Knox, Loudon, Monroe, Morgan, Roane, Scott, Sevier, Sullivan, Unicoi, Union and Washington counties

South Central Tennessee Development District
815 S. Main Street
P.O. Box 1346
Columbia, TN 38402
Phone: 931-381-2040

Service Area: Bedford, Coffee, Franklin, Giles, Hickman, Lawrence, Lewis, Lincoln, Marshall, Maury, Moore, Perry, and Wayne counties

Tennessee Technology 2020
1020 Commerce Park Drive
Oak Ridge, TN 37830
Phone: 865-220-2020

Service Area: Anderson, Blount, Campbell, Claiborne, Cocke, Grainger, Hamblen, Jefferson, Knox, Loudon, Monroe, Morgan, Roane, Scott, Sevier and Union counties

West Tennessee Venture Capital Corporation
5 North Third Street
Memphis, TN 38103
Phone: 901-522-9237 or 901-523-1884

Tennessee Small Business Energy Loan Program
William R. Snodgrass TN Tower
312 8th Avenue North, 9th Floor
Nashville, TN 37243-0405
Phone: 615-741-6671

Capital Across America, Inc.
414 Union Street, Suite 2025
Nashville, TN 37219
Phone: 615-254-1515
Fax: 615-254-1856

Engages in debt financing primarily to women-owned businesses in service, manufacturing and retail operations. It finances growth of existing companies in amounts ranging from $250,000 to $1,500,000. Its market is regional, encompassing Tennessee, Ohio, Alabama, Georgia, North Carolina, and Kentucky.

Commerce Capital, LP
611 Commerce Street, Suite 2602
Nashville, TN 37203-3742
Phone: 615-244-1432
Fax: 615-242-1407

Commerce Capital specializes in loans to small-growth companies that are expanding operations. Early-stage financing may be considered. Commerce seeks loan opportunities for firms in the health care, manufacturing, environmental, communication and information fields. It requires founders to be active in the business.

Equitas, LP
2000 Glen Echo Road, Suite 101
Nashville, Tennessee 37215-2857
Phone: 615-383-8673

Equitas specializes primarily in lending to existing businesses in a growth mode. Equitas supports second-stage financing where firms have achieved break-even cash flow.

Finova Mezzanine Capital
500 Church Street, Suite 200
Nashville, Tennessee 37219
Phone: 615-256-0701

Finova Mezzanine Capital specializes in lending to existing firms that are in an expansion mode. They seek high growth small firms with revenues in the $5,000,000 to $25,000,000 ranges, and with loans from $500,000 to $2 million.

International Paper Capital Formation, Inc.
International Place II
6400 Poplar Avenue
Memphis, Tennessee 38197-0100
Phone: 901-763-6282

Invests in loans or equity to socially- or economically-disadvantaged small businesses as defined by the SBA. It specializes in existing and expanding companies with investments from $40,000 to $300,000.

Pacific Capital
109 Westpark Drive, Suite 260
Brentwood, Tennessee 37027-5032
Phone: 615-292-3166

Pacific specializes in secured lending to existing health care and educational services companies in amounts ranging from $500,000 to $2,500,000. It utilizes a variety of repayment plans with interest only for five years with stock warrants.

Valley Capital Corporation
Krystal Building
100 W. Martin Luther King Blvd., Suite 212
Chattanooga, TN 37402
Phone: 423-265-1557

Invests in loans and equity to socially- or economically-disadvantaged small businesses as defined by the SBA. It specializes in light manufacturing, regional or national franchises and wholesale distribution with investments ranging from $50,000 to $300,000.

West Tennessee Venture Capital Corporation
5 North 3rd Street
Memphis, TN 38103-2610
Phone: 901-522-9237

Invests in loans and equity to socially- or economically-disadvantaged small businesses as defined by the SBA.

U.S. Department of Agriculture
Rural Business Cooperative Service
3322 West End Avenue, Suite 300
Nashville, Tennessee 37203-1084
Phone: 615-783-1341

Telecommunications Assistance Program (T.A.P.)
For additional information, contact:

Tennessee Department of Economic and Community Development
Small Business Division
William R. Snodgrass TN Tower, 11th Floor
312 8th Avenue North
Nashville, Tennessee 37243-0405
Phone: 615-741-2626
Fax: 615-532-8715

Tennessee Industrial Training Service
Department of Economic & Community Development
William R. Snodgrass TN Tower, 10th Floor
312 8th Avenue North
Nashville, Tennessee 37243-0405
Phone: 615-741-1746
Fax: 615-741-0607

Tennessee Department of Labor
Worker's Compensation Division
Gateway Plaza, 2nd Floor
710 James Robertson Parkway
Nashville, Tennessee 37243
Phone: 800-332-2667

U.S. Small Business Administration
Nashville Regional Office
50 Vantage Way, Suite 201
Nashville, TN 37228-1500
Phone: 615-736-5881 Ext. 235

Tennessee Department of Commerce and Insurance
Securities Registration Division
500 James Robertson Parkway
Davy Crockett Tower, Suite 680
Nashville, TN 37243-0584
Phone: 615-741-5911
In-State Toll Free: 800-863-9117