State Raising Rural Opportunity Fund
Thursday September 13, 2007
BLAKE FARMER
from: WPLN - Nashville Public Radio - 90.3FM and 1430AM
The state has begun raising a 10-million dollar fund to help rural businesses grow and spur economic development outside of the urban centers.
Governor Phil Bredesen announced the creation of a public/private partnership called the Tennessee Rural Opportunity Fund (today/yesterday) at his annual economic development conference. He says companies that have established themselves and passed the start-up phase are often stuck without access to money that would help them continue growing.
"There are so many of these businesses that they get going, they've got a good idea. They're just too small to access the traditional capital markets. They're not really candidates for bank loans."
Southeast Community Capital Corporation will operate the new fund, and the Tennessee Bankers Association is in the process of raising the capital. Banks who invest in the fund will receive tax breaks from the state. The state's part in the fund will include a 1.5-million dollar forgiveable loan to act as a reserve and 250-thousand dollars per year for the next five years for operating costs.
If the revolving fund works as planned, it will provide 25-million dollars in loans over the next 10 years and generate 600 new jobs.
