For release 3/9/2011
Contact: Garnet Bass, director of communications, 919-250-4314
RALEIGH, N.C. -- Carolina Trust Bank of Lincolnton has issued the nation’s first loan under a new program designed to bolster business lending. The loan was issued under the North Carolina Capital Access Program, a federally funded program that encourages business lending by reducing lender risk. North Carolina is the first state to get the program up and running.
The loan was awarded to J&S Reel Logging Inc. of Iron Station in Lincoln County to finance log-loading equipment.
NC-CAP was made possible by $46.1 million in federal funding through the Small Business Jobs Act of 2010. Gov. Beverly Perdue designated the Rural Center to administer the program in all 100 counties.
NC-CAP encourages banks and other qualified institutions to consider loans that might fall just outside their traditional underwriting standards. It works by matching an up-front fee, typically 2 percent to 7 percent, paid by the lender and borrower. The combined amount is deposited into a pooled reserve fund to cover losses in the event of default.
The program is available statewide for loans to businesses with fewer than 500 employees and for amounts up to $5 million are eligible.
“Over the next two years, NC-CAP will mean $800 million in business lending for North Carolina,” said Rural Center President Billy Ray Hall. “More business means more jobs.”
The N.C. Rural Economic Development Center is a private, nonprofit organization whose mission is to develop sound economic strategies that improve the quality of life in rural North Carolina, with a special focus on individuals with low to moderate incomes and communities with limited resources. The center operates a multifaceted program that includes conducting research into rural issues; testing promising rural development strategies; advocating for policy and program innovations; and building the productive capacity of rural leaders, entrepreneurs and community organizations.