Vermont Business Magazine Community Capital of Vermont, located in Barre, is receiving $1 million from the Small Business Administration for its Microloan Program. This is the largest commitment Community Capital of Vermont has received from the SBA to date. When it was selected to be a microloan intermediary in April 2013, the SBA initially provided Community Capital of Vermont $300,000. Since then Community Capital of Vermont has made more than 150 microloans worth more than $2.1 million. Microloans went toward funding a brewery, an automobile service shop, a clothing retail store, an excavation company and many others.
Of the 24 microloan intermediaries throughout New England, Community Capital of Vermont annually ranks at the top of the list in microloan volume and monetary amount.
"Our partnership with the SBA has helped Vermonters create and retain jobs, build wealth, and enhance our downtowns and working lands," said Carol Lighthall, Community Capital of Vermont Executive Director. "Through flexible financing such as varying rates, terms, and seasonal payments, we are a stepping stone to help micro-entrepreneurs build sales, experience, and credit to become sustainable businesses. Since the inception of our partnership with SBA, 84 percent of our loans have been made to low-income individuals, women-owned businesses, and/or start-ups."
Microloan intermediaries are nonprofit community-based organizations with experience in lending and technical assistance. They administer the Microloan Program to make loans to business owners who lack the collateral or credit history to qualify for a traditional loan. The program provides small businesses with loans up to $50,000, which can be used for working capital, inventory, furnishings and equipment. The SBA started the Microloan Program in 1992.
"The smallest of small businesses can sometimes have a difficult time getting capital even for the average microloan. This is where the Microloan Program comes in. Community Capital of Vermont serves as that gap lender that can provide capital to those entrepreneurs who want to start or grow their business, but may not have a proven track record yet," said Darcy Carter, SBA Vermont District Office Director.
In addition to $1 million, Community Capital of Vermont has also received a $239,000 technical assistance grant from the SBA to help microloan borrowers. Technical assistance helps entrepreneurs obtain the additional tools needed to operate their businesses successfully. The grant can be used for teaching an entrepreneur how to use QuickBooks, hiring a consultant to demonstrate how to properly market a product or bringing in a business advisor to offer small business counseling.
"Providing post-loan support in partnership with our borrowers is a key component of our lending program, and critical to long-term business success," said Lighthall. "As microbusinesses navigate unique and variable business challenges, the SBA's technical assistance grant helps us work in partnership with our borrowers to design custom plans and map out attainable goals to improve the viability of their businesses."