REDC Community Capital Group has announced the start of a new campaign aimed at startups and businesses whose annual revenue is less than $6.5 million and who are struggling to obtain credit.
Businesses that are interested should contact REDC and schedule a meeting with a loan officer, as the process is similar to that at a regular bank.
Under the organization’s various loan programs eligible businesses can obtain financing for start-up or expansion, and the purchase or rehab of ‘owner operated’ commercial properties and machinery and equipment.
The new campaign will be aided by a $1 million grant given by the U.S. State Department of the Treasury’s CDFI fund, and made possible by appropriately awarded stimulus money. According to REDC’s Vice President of Public/Corporate Affairs, Vanessa Minter, the grant money will go towards the organization’s Business Enterprise Zone Loan (BEZL) program. The program has a maximum loan of $250,000 and goes towards helping start-ups or existing businesses finance the acquiring of new assets, or the updating of old ones.
“We want entrepreneurs or existing businesses to know that with this money, economically speaking, there are options to explore,” said Minter.
In an email President and CEO of the organization, Stephen Schley said that the typical business targeted by the BEZL program could vary, but would have limited capacity in meeting the down payment requirements for such loans through traditional lenders, which normally require higher down payments and offer lower loan to value than our program.
“Under our BEZL product, eligible businesses can put down as low as 10 percent, obtain a loan to value up to 90 percent and extend repayment over twenty years, with a fixed, non-callable interest rate for the life of the loan,” he said.
Previously the REDC could only offer their BEZL product to small businesses in the three enterprise zones in Richmond, but Schley said the grant allows them to extend the program to all eight enterprise zones in the Richmond/Petersburg MSA.
The grant will be used to bolster the $3.5 million already used for BEZL programs. Schley said the money to fund a marketing campaign designed to spread awareness of the company’s lending products, and without the grant such a campaign would not be possible.
There is no deadline for the use of the CDFI grant money.
In 14 years the REDC has provided loans for 713 business for a total of $30.2 million.
Drew Jackson is a BizSense reporter. Please send news tips to [email protected].