Background
Micro loans help plumbers prosper
MARION -- Scott Blake had a good job as a licensed plumber at Biltmore Estate, but he wanted what a lot of guys with in-demand skills want: more responsibility, more career freedom and less answering to the boss.
In 2002 he took the plunge and opened Father and Son Enterprises, his own plumbing operation. Local banks, though, didn’t share Blake’s faith in the new business. He couldn’t secure a loan.
So Blake turned to the Rural Center and borrowed $1,500 through the N.C. Microenterprise Loan Program to purchase a band saw. That tiny amount helped kick-start the business.
“We couldn’t be where we are without the help,” Blake said.
After paying off that first loan, the company took out others. Blake and his son, Levi, scoured the Internet for good deals on work trucks, even flying to California to pick up a used truck from the Los Angeles County water department. The pair have since traveled to Ohio, West Virginia and New Hampshire to retrieve trucks and equipment, each piece financed by a microenterprise loan.
The company has grown enough for the Blake men to hire a full-time employee.
“When we first started out, we didn’t even have a truck,” said Lynne Blake, who serves the company in three capacities: wife, mom and business manager. “He worked out of the back of an old Jeep Wagoneer. It’s funny to think back to those days.”
Expanding business opportunities
Small Business Credit Initiative
The N.C. Small Business Credit Initiative is helping make capital available for business startups and expansions across the state. With more business investment comes more jobs for North Carolinians.
The initiative works primarily through traditional lenders such as banks and credit unions. By reducing the risks involved, it allows lenders to approve some business loans they otherwise could not. The initiative also invests in venture capital and angel funds, which in turn make equity investments in North Carolina businesses.
The initiative is made possible by $46.1 million in federal funding under the Small Business Jobs Act of 2010. Gov. Beverly Perdue designated the Rural Center to administer the program in all 100 counties.
With three component programs, the initiative is expected to enable more than $600 million in business loans and equity investments by 2016.
The three components:
The N.C. Capital Access Program provides matching reserve funds for business loans that are just outside a lender's usual standards. The average NC-CAP loan is $100,000. When a loan is approved and enrolled in NC-CAP, the borrower pays a fee, which is matched with money from the program. The funds together are deposited into a reserve account held by the lender, to offset losses in case of default. Potential borrowers may apply through their local lenders.
NC-CAP information for lenders
Participating lenders by county
Business owner's guide to NC-CAP
The N.C. Loan Participation Program reduces a lender's risk by purchasing up to 20 percent of a loan. The program typically assists loans of $250,000 to $5 million. Special consideration may be given for loans to businesses in underserved communities and to businesses owned by women and minorities. Potential borrowers apply through their local lenders.
Loan Participation Program information for lenders
Participating lenders by county
Business owner's guide to the Loan Participation Program
The N.C. Fund of Funds Program has invested $10 million in four venture capital and angel funds, which in turn invest in North Carolina businesses as early as the conceptual stage: Hatteras Ventures, IDEA Fund, IMAF and Salem Investment. The individual funds are responsible for finding and assessing potential investments in North Carolina businesses.
Contacts
Western North Carolina
Tony Johnson, Senior Director, Business Development
Eastern North Carolina
Brooks Batchelor, Associate Director, Small Business Credit Initiative
Central North Carolina
Tom Wall, Associate Director, Small Business Credit Initiative
N.C. Rural Economic Development Center
4021 Carya Drive
Raleigh, NC 27610
Telephone: 919-250-4314
Fax: 919-250-4325
Information for lenders
N.C. Loan Participation Program
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See a list of participating lenders.
Download business owner's guide. |
The N.C. Loan Participation Program helps lenders make more business loans. The program is designed for terms loans of $250,000 to $5 million that have a shortfall in collateral or cash flow coverage or raise other underwriting concerns.
By purchasing up to 20 percent of an eligible loan, the program allows you to reduce your risk while extending credit to eligible businesses.
The N.C. Loan Participation Program is open to lenders that participate in the N.C. Capital Access Program. Enrollment is easy.
Lenders that work with the Loan Participation Program appreciate our dedication to fast decisions and procedural ease. The process:
- A signed master participation agreement covers the responsibilities of both the lender and the Rural Center.
- The lender indentifies the loans.
- The lender shares underwriting analysis with the Rural Center.
- The Rural Center evaluates credit and issues a commitment to buy a stake in the loan.
- The lender closes the loan and sells a position to the Rural Center.
- The lender keeps all its standard fees. There are no additional fees to use this program.
- The lender services the loan and shares proportional debt payments with the Rural Center
Sign up today
Contacts
Western North Carolina
Tony Johnson, Senior Director, Business Development
Eastern North Carolina
Brooks Batchelor, Associate Director, Small Business Credit Initiative
Central North Carolina
Tom Wall, Associate Director, Small Business Credit Initiative
N.C. Rural Economic Development Center
4021 Carya Drive
Raleigh, NC 27610
Telephone: 919-250-4314
Fax: 919-250-4325
Current participating lenders
Loan Participation Program
Bank of North Carolina
Bank of Oak Ridge
Carolina Bank
Carolina Trust Bank
Charlotte Metro Federal Credit Union
Coastal Bank & Trust
First Federal Bank
First Federal Savings Bank
High Point Bank & Trust
KS Bank
Lumbee Guaranty Bank
Macon Bank
N.C. Community Development Initiative Capital
New Dominion Bank
NewBridge Bank
North State Bank
Patriot State Bank
Premier Commercial Bank
Select Bank and Trust
SoundBank
The Support Center
VantageSouth Bank
Yadkin Valley Bank & Trust (Piedmont Bank, High County Bank, Cardinal State Bank & American Community Bank)