Trades & financing pricing

Three tiers.One term sheet.

Revenue-based micro-financing for inner-city trades founders, sized to the bid. Each tier carries the same vocabulary a CDFI credit committee expects — royalty, term, cap, floor, security — and stacks matched philanthropic capital on top where the geography and trade qualify.

Apply to StepsmithRead the term sheet
  • Revenue-based
  • Capped — never a balloon
  • Matched philanthropic capital where eligible

The tiers

Pick the ladder rung that matches the bid.

Same revenue-based mechanic, same cap discipline, same CDFI partner. The tier changes the size of the ask, the depth of underwriting, and what gets stacked on top.

01STARTER

$5K principal

Starter
Get licensed, get the first job, get on paper.
Principal range
$5,000 – $10,000
Royalty
6% of monthly gross
Term
24 months
Repayment cap
1.30× principal
Payment floor
$150 / month
Match
—
Security
Personal guaranty + blanket UCC-1

At this tier

  • Diagnostics — licensing + pricing benchmark
  • Tools + light equipment to first PO
  • 1–2 person crew
  • Bookkeeping onboarding (QuickBooks)

Founder brings

  • Active journeyman license (or in process)
  • 12 months of books or IRS transcripts
  • Founder + first hire on payroll
Apply — Starter
02GROWTH

$50K principal

Growth
Hire a real crew, bid bonded work, build a backlog.
Principal range
$25,000 – $75,000
Royalty
6% of monthly gross
Term
36 months
Repayment cap
1.35× principal
Payment floor
$500 / month
Match
NMTC leverage available (CDFI allocatee)
Security
UCC-1 + equipment lien + personal guaranty

At this tier

  • Full diagnostics + bonded-bid prep
  • Crew-scale equipment (van, lift, specialty tooling)
  • 3–6 person crew
  • 60% local-hire pledge on file
  • NMTC allocation when geography qualifies

Founder brings

  • Active license + 2 trade references
  • 24 months of books + P&L
  • Bonding letter or bonding plan
Apply — Growth
03SCALE

$250K principal

Scale
Anchor-buyer backlog, multi-crew operation, region-ready.
Principal range
$100,000 – $250,000
Royalty
5% – 7% tiered (gross)
Term
48 months
Repayment cap
1.40× principal
Payment floor
$1,500 / month
Match
NMTC stack + philanthropic match (1:1)
Security
UCC-1 + equipment lien + pledge / negative-pledge covenants

At this tier

  • Underwriting + commercial-credit file
  • Multi-crew fleet + yard / shop build-out
  • 7–15 person crew
  • NMTC allocation + matched philanthropic capital
  • Quarterly financial review + reporting cadence

Founder brings

  • Active license + 3 trade references
  • 36 months of books + audited financials
  • Anchor buyer identified (municipal, health, higher-ed, developer)
Apply — Scale

Repayment terms

How the note actually services.

Same vocabulary a CDFI credit committee uses. Royalty is calculated against monthly gross and capped at a hard multiple of principal — there is no compounding, no balloon, and no prepayment penalty.

NMTCNew Markets Tax Credit (IRC §45D) — federal credit that lowers the effective cost of capital for investments in low-income communities.
QALICBQualified Active Low-Income Community Business — the business entity that must receive a QLICI for the credit to flow.
CDFICommunity Development Financial Institution — a certified mission-driven lender; the allocatee that holds the NMTC allocation.
SBAU.S. Small Business Administration.

Term sheet

8 rows
Royalty
A fixed percentage of monthly gross revenue remitted to Stepsmith until the cap is reached or the term ends. Not interest; not equity.
Monthly payment floor
The minimum monthly remittance regardless of gross. Set so the note services itself even in a slow month — never punishes a founder for a lean cycle.
Term
Maximum months from first disbursement to term-end. Most notes close out before term via the cap; the term is the outside date, not the expected one.
Total repayment cap
Hard ceiling on aggregate remittance as a multiple of principal. Once the cap is paid, the note is satisfied in full — no further obligation, no balloon, no prepayment penalty.
Pause / forbearance
Up to 90 days of forbearance per 12-month period for documented events (medical, weather, anchor-buyer slip). Accrues the clock; does not forgive principal.
Prepayment
Permitted at any time without penalty. Remit the lesser of remaining principal × cap-multiple or current balance. The founder owns the prepayment decision.
Default handling
Cure period of 30 days from written notice. Cure = remittance of the missed amount + a brief written explanation. No acceleration on first default; second default triggers CDFI review.
Reporting cadence
Monthly royalty remittance + quarterly financial upload (P&L + bank rec). Annual on-site or video review for tier 03; every 24 months for tier 02.

Matched capital

A $100K ask in Detroit — Cleveland and St. Louis scale the same way.

Revenue-based repayment keeps the note founder-friendly. Matched philanthropic capital keeps the build-sized capital serious. Four triggers unlock the match; one milestone disburses it.

Illustrative build — Detroit

$300K total
Founder principal request
$100,000
The ask.
Stepsmith revenue-based note
$100,000
Royalty-repaid, capped, no equity dilution.
NMTC allocation (CDFI allocatee)
$100,000
39% QLICI subsidy — effective cost-of-capital reduction.
Matched philanthropic capital
$100,000
Committed at intake; disbursed at first-PO milestone.
Total deployable into the build
$300,000
A $100K ask lands as a $300K build.

The four triggers

What unlocks the match
  1. 01Inner-city census tract (Stepsmith service geography)
  2. 02Eligible trade (HVAC, electrical, plumbing, carpentry, roofing)
  3. 0360% local-hire pledge on file
  4. 04Anchor buyer identified (municipal, health, higher-ed, developer)

Timing

When the match actually moves
  • Intake: letter of intent issued
  • Signing: 40% disbursed
  • First anchor PO: 40% disbursed
  • 90-day post-PO review: final 20%

Underwriting & disclosures

The fine print — up front, not in footnotes.

Stepsmith treats disclosure as part of the deal, not a compliance afterthought. Security, reporting cadence, and the regulatory frame below apply across all three tiers unless a specific tier explicitly differs.

Section

Security position

Stepsmith takes a UCC-1 filing on business assets and an equipment lien on financed gear at every tier. Personal guaranty applies to tiers 01–03. Tier 03 adds affirmative and negative-pledge covenants plus change-of-control reporting. Pledged collateral is released pro-rata as the cap is repaid.

Section

Reporting cadence

Monthly royalty remittance + quarterly financial upload (P&L, bank reconciliation, AR aging). Tier 03 carries an annual on-site or video review. Material adverse changes are reported within 5 business days. Books are reviewed at intake, at the first-PO milestone, and at each annual review.

Section

Regulatory disclosures

Stepsmith is not itself a Community Development Financial Institution (CDFI). Capital is deployed in partnership with a CDFI allocatee. The revenue-based note is not a security; communications are not an offer of securities. Royalty obligations survive change of control. Subject to underwriting and applicable state usury limits. NMTC = New Markets Tax Credit, IRC §45D; QALICB = Qualified Active Low-Income Community Business; SBA = U.S. Small Business Administration.

Frequently asked

Questions lenders, CDFIs, and founders ask before they sign.

The credit-committee version — distinct from the founder-only FAQ on the home page. Anything longer, write to stepsmith@polsia.app.

Match capital to the bid

Apply with the tier,not a guess.

Pick the ladder rung, send a one-paragraph intro and the trade you want to scale, and the credit file goes on the desk of the Stepsmith underwriting lead within 48 hours.

Apply

Tier, trade, city, one paragraph — that's all the intake needs to start.

stepsmith@polsia.app

Buyer network, press, partnerships — same inbox. We route fast.