Micro Step-Up Loan
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Four Bands is not like a bank. They
teach you the steps to succeed and
then provide loan support.
— Eva Gilbert, owner
Eva’s Hair and Nails,
Cheyenne River Reservation
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Loan Amount: up to $2,500
Interest Rate: 10.25% - 12.25%
Term: 24 months
Market: Future microloan client
Prerequisites: 1) Credit report review
2) Confirm outstanding debt
3) Complete Credit when Credit is Due course
As part of its goal to offer a seamless customer-service delivery model, Four Bands Community Fund introduced a credit builder loan in 2006 to help new clients improve their credit worthiness and position themselves for Four Band’s business loans.
The Step-Up Loan requires clients to first create and implement a Credit Builder Action Plan to repair their credit histories and develop a positive credit relationship with the organization:
- review their credit report
- contact creditors in the derogatory report to confirm amounts owed
- complete personal finance training: Credit when Credit is Due
The potential entrepreneur is then eligible to apply for a 24-month Step-Up Loan up to $2,500 to pay off delinquent accounts, build a credit history with Four Bands and access business loans. Four Bands joined Credit Builder Alliance in order to report data on the open accounts and help clients improve their credit scores while paying back their loans.
Four Bands Community Fund of Eagle Butte, South Dakota is a certified Community Development Financial Institution (CDFI) serving the Cheyenne River Indian Reservation. They assist entrepreneurs with training, business incubation, and access to capital to encourage economic development for the low-income residents of the Reservation. Often, credit worthiness of potential entrepreneurs presents itself as a barrier to accessing the micro and small business loan products that Four Bands offers.
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