NC: North Carolina to Receive $46 Million in Federal Funds for Small Business Loans
18 Jan, 2011
Community banks can leverage more than $800 million in assistance to small, local businesses
Image via Wikipedia
North Carolina Gov. Bev Perdue recently announced that North Carolina will receive $46.1 million in federal funds for the N.C. Capital Access Program (NC-CAP) at the North Carolina Rural Economic Development Center. The money, allocated through the Small Business Jobs Act of 2010, will allow community banks to help leverage more than $800 million in credit for North Carolina small businesses.
North Carolina is one of the first two states to have their applications approved by the U.S. Treasury Department. Gov. Perdue called on Congress to fund the Jobs Act in October, vowing that North Carolina would put the money to work immediately. Between 1994 and 2008, NC-CAP helped North Carolina lending institutions make 1,850 small business loans totaling more than $103 million, helping save or create more than 27,000 jobs. NC-CAP is a loan loss reserve program that encourages financial institutions to make small business loans.
“Expanding access to credit for small businesses is critical for speeding North Carolina’s economic recovery. Two-thirds of new jobs are created by small businesses, and they employ our friends, neighbors and family members,” said Gov. Perdue. “We will use these federal funds to help those small businesses to grow, and that helps communities across our state.”
"Small businesses depend on access to credit in order to hire and expand, and this funding will better position main street entrepreneurs to create new jobs and invest in their local communities," said Treasury Secretary Tim Geithner. "Innovative public-private lending partnerships like the State Small Business Credit Initiative have a proven track record, and I am pleased this funding is on its way to North Carolina to support job creation and economic growth."
"I feel this is a very important program that will allow small businesses and manufacturers the opportunity to work through North Carolina bankers to acquire much needed capital," said U.S. Rep. Walter Jones (R-NC).
“Everywhere I go, I talk to small business owners that are concerned about the access to credit,” said N.C. Commerce Secretary Keith Crisco. “It’s critical that we get money flowing so that small businesses can start growing again. From my own experience I know that for small businesses, credit is the key to sustainability, growth and profits.”
“NC-CAP is a smart, no-nonsense approach for stimulating small business growth,” said Billy Ray Hall, president of the North Carolina Rural Economic Development Center. “We’re honored to be entrusted with administering this new program and are prepared hit the ground running. More than 30 financial institutions already have pledged to participate, representing 60 percent of all branch locations.”
Through the program, lenders are able to provide eligible small businesses with flexible terms, minimal additional paperwork and quick turnaround on loans. All businesses located in North Carolina with 500 or fewer employees are eligible for loans under the program. The maximum loan amount is $5 million. Loans may be used to finance the acquisition of land, construction or renovation of buildings, purchase of equipment and working capital.
Small business owners who are interested in the program should contact their local bank or lending institution and ask about their participation in the NC-CAP program. More information is also available by calling BLNC at 1-800-228-8443. Loans backed by NC-CAP should be available by the end of January.
“Many of North Carolina’s small businesses are poised for growth. Improving access to credit is essential to support the small business recovery and growth we need to create jobs,” said Scott Daugherty, North Carolina’s first Small Business Commissioner.
Increasing access to credit for North Carolina small businesses has been a hallmark of Gov. Perdue’s administration. In 2009, Gov. Perdue brought together the N.C. Bankers Association, the N.C. Commissioner of Banks and the N.C. Small Business Commissioner to create the Capital Access Network which would help small businesses that were struggling to secure credit to grow, hire and invest.
Gov. Perdue was an early and vocal advocate for expanding credit for small businesses, including lobbying the President, North Carolina’s Congressional delegation, the U.S. Treasury Secretary and the U.S Small Business Administrator.