Entrepreneurship encouraged through rural loans
Saturday September 01, 2007
Tennessee Rural Opportunity Fund
from: the Cumberland Business Journal
September 2007; Issue 33
page 13
How can it help the businesses and potential entrepreneurs in the 15-county CBJ coverage area?
The Fund will provide access to capital to early stage and established businesses to assist them with growth. Businesses in the Upper Cumberland will have a new source of funds available for:
- equipment and facilities
- working capital
- growth capital
- lines of credit
- accounts receivables
- lines of credit
- purchase orders
- start-up financing if the principal has more than five years of P&L experience in the industry
What types of businesses are targeted?
- Early stage companies ready to crossover to expansion stage
- Expansion stage companies needing capital for accelerated growth
- Companies with inconsistent growth and profitability
- Companies with good ideas and strong management that do not have access to traditional financing sources
What is the first step a business must take?
Interested business owners or those looking to start a business need to contact SCC's offices and request an application packet or they can go to the SCC Web site at www.sccapital.org to begin the application process.
Are there already success stories from the U.C. region?
One business benefiting from the Fund is Perry Contracting Group, owned by Jonathan Perry. The Cookeville business located at 446 Zion Rd extracts and distributes flagstone, fieldstone, crab orchard, boulders, cut stone, wall stone, stacked stone, garden benches and address stones, with a target sales market throughout the Southeast.
Q&A
Hank Helton
Senior Vice President of Southeast Community Capital Corporation and TN Rural Opportunity Fund Manager
What is the TN Rural Opportunity Fund?
TN ROF is scheduled to launch in October 2007. It is a first of its kind public-private partnership between member banks of the Tennessee Bankers Association (TBA), the State of Tennessee and Southeast Community Capital Corporation (SCC). The Fund will provide loans ranging from $20,000 to $125,000 to small businesses unable to access traditional bank capital, providing affordable capital to grow small businesses and create jobs.
How will this program make a difference?
The TN ROF will provide financing to over the next 10 years, creating more than 600 new jobs resulting in an increase in annual payrolls of $18 million.
What is SCC's role in this process?
Through this $10 million revolving loan fund, Southeast Community Capital will provide financing to Tennessee's rural small businesses that are unable to access traditional bank loans. Created in 1999 as a nonprofit and then receiving its CDFI certification in 2001, SCC has originated more than $20 million in growth capital loans to some 215 companies. Those companies have created more than 786 new jobs with average wages of $15.20 per hour.
Why would banks want to participate?
Investing banks receive CRA investment credit while helping the next generation of small, minority- and women-owned businesses in rural Tennessee obtain affordable growth capital. The structure of the fund includes a recapture of principal through Tennessee Franchise and Excise Tax Credits and an annual interest rate approaching treasury yields.
