Securing Operating Capital Loans for Minority Business in the Alabama Black Belt Counties

 

  

Need:

Many segments of the small business community including women, minorities, and veterans businesses in low-to-moderate income areas have difficulty receiving capital from traditional or commercial lending sources.  The RBEDC recognized this as being one of our major problems for our clients and knew that this was a need that had to be provided.  We were able to offer all technical services needed by our clients, except loan financing. 

How Rural Development Helped:

  

Tuskegee University Rural Business and Economic Development Program became a Technical Assistance Provider for the U.S. Small Business Administration in 2005, which provides services to small business owners in the State of Alabama.  Technical assistance is provided to borrowers/clients under the SBA Community Express Loan Program.  Through the SBA Community Express Loan Program the Rural Business and Economic Development Program is able to submit loan applications to three (3) different lenders.  The lenders are Business Loan Express, Superior Financial Group and Capital One.  Our program offer potential businesses access to working capital in large amounts that many financial institutions are not willing to make. The RBDC is able to help clients who have a desire to start their own business by helping them obtain funding up to $50,000 and existing businesses funds up to $150,000 to increase their working capital to meet their daily operating expenses, or purchase equipment to maximize their growth.  In addition, borrowers are required to receive counseling and periodical monitoring from the RBEDP to ensure the potential success of their enterprises.

The Results:

  Without the assistance of RBEDP small businesses in low to moderate income areas (in particular women, minorities, and/or veterans) would continue to have extreme difficulty in obtaining financing to start or retain their businesses.  Through the assistances of the RBEDP  $593,000 have been released to minorities own businesses in the Black Belt region along with other technical services as needed.   As a result of our program the following businesses were created or retained:

        2005                                                                                           2006

Women Businesses       =          6                                  Women Businesses       =          3

Men Businesses            =          8                                  Men Businesses            =          5

Veteran Businesses       =          1                                  Veteran Businesses       =          1

Loan Amount               =          $262,000                     Loan Amount               =          $206,000

  

      2007                                                                           

Women Businesses       =          0                                   

Men Businesses            =          2                                           

Veteran Businesses       =          1                                        

Loan Amount               =          $125,000                   

           

As a result of the RBEDP minority own businesses now can run a viable business knowing that they have an avenue to resort to if additional capital is needed.  Small businesses can also rely on us to provide the technical assistance needed to ensure their growth and success.