Small Business Loans
Back in May, House Bill 1043, a bipartisan effort by the NC General Assembly and which was signed into law by Governor Cooper, appropriated an additional $125 million to the Golden LEAF “North Carolina Rapid Recovery Loan Program.” H.B. 1043 was aimed at providing aid to North Carolina’s entrepreneurs and small-business owners.
Loans made from the program to small businesses includes a limit on the number of employees per business, a minimum interest rate for the first six months of the loan term, and an increased time for repayment. The Rapid Recovery Loan Program was launched on March 24 with an initial allocation of $15 million. With further funding, the program was able to offer low interest loans of up to $50,000 with no payments for six months to businesses affected by COVID-19. However, if the loan is not repaid within six months, the loan will automatically convert to a term loan.
The Rural Center acts as a program administrator, managing the flow of loan applications to lending partners for underwriting and servicing. Lending partners such as the Business Expansion Funding Corporation (BEFCOR), Carolina Small Business Development Fund, and Thread Capital.
Through June 29, 2020 there have been 683 loans issued out of the 7,744 applications received. These 682 loans when totaled equal roughly $24 million approved by the N.C. Rural Center’s Thread Capital unit and the nonprofit Golden Leaf Foundation. Roughly 62% of those loans went to “historically underutilized business borrowers,” (otherwise classified as women and minority owners). Furthermore, nearly 13% went to Black business owners, which is nearly triple the percentage of Black businesses in the state. The average loan of $33,000 is designed to provide businesses with immediate financial assistance to stay alive during the economic shutdown.