USDA Rural Development State Director Vicki Walker has announced $375,000 in USDA funding to provide small loans and technical assistance to very small businesses in rural portions of the Mid-Willamette Valley.
With the announcement, Community Lending Works (CLW), an affiliate nonprofit corporation of Neighborhood Economic Development Corporation (NEDCO), will receive a $300,000 loan and a $75,000 grant through USDA’s Rural Microentrepreneur Assistance Program (RMAP). The funds will be used by CLW to provide microloans and technical expertise for business start-up or development with eligible microentrepreneurs, which are defined as very small businesses with 10 or fewer employees in rural Lane, Douglas and Marion counties.
"This USDA investment is designed to capitalize rural small businesses, which allows the owners to expand operations, enter into new markets and increase hiring," Walker said.
Since Community Lending Works’ inception in late 2011, they have funded more than 240 loans totaling over $918,450. CLW’s portfolio is diversified across consumer and business loans. Through these loans, CLW estimates they have helped create over 209 jobs.
Community Lending Works will leverage USDA RMAP funds to increase access to capital while working with NEDCO’s Hatch Business Incubator program to provide comprehensive technical assistance and guidance for rural microentrepreneurs. As for basic criteria for use of funds, eligible applicants must demonstrate the use towards their business either for start-up or expansion costs, equipment, or general operating capital needs. Based on demonstrated need and demand in the target market, and associated capitalization strategies, CLW anticipates providing more than 260 microenterprise loans worth $2.2 million from 2013-2015. CLW’s short-term lending strategy, coupled with technical assistance for microentrepreneurs, allows them to turn over their loan fund multiple times in this timeframe.
Under RMAP, USDA provides loans to Microenterprise Development Organizations (MDOs) that, in turn, make microloans to eligible rural businesses. Grants are available for MDOs to provide technical assistance and training, particularly in rural areas experiencing persistent poverty or significant outmigration. The funding is contingent upon the recipients meeting the terms of their loan or grant agreements. USDA does not directly provide funds to the very small businesses, which are the program’s ultimate recipients.
USDA currently provides loan capital for rural business lending across Oregon through 16 intermediary organizations through RMAP and the Intermediary Relending Program. These intermediary lenders, in turn, finance small and emerging business ventures that might not otherwise be able to obtain financing.
President Obama's historic investments in rural America have made our rural communities stronger. Under his leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America's economy, small towns and rural communities.