MONTPELIER, Vt. – Representatives of the Vermont Community Loan Fund (VCLF), small businesses from across the state, the U.S. Small Business Administration (SBA) and Senator Patrick Leahy said Friday that two key loan provisions of the American Recovery and Reinvestment Act – the Community Development Financial Institution (CDFI) Fund and the Small Business Administration’s Micro-Loan Program – are helping Vermont businesses find access to much-needed capital.
Leahy said the Recovery Act enabled VCLF to receive a $2 million CDFI grant from the Department of the Treasury and a $750,000 loan fund allocation from the SBA to make loans to small businesses and community organizations. VCLF, a non-profit statewide community lender, offers mission-based loans based on more than a business’ bottom line -- factoring in job creation and social impacts. Leahy said this enables VCLF to make riskier loans, giving struggling Vermont businesses an alternate lending option to find capital in this difficult economy. The CDFI grant can be leveraged into more than $10 million in small business loans.
“The financial crisis has made finding a loan near impossible for some small businesses – threatening to further cripple our economy,” said Leahy. “Small business owners with proven track records are calling me regularly asking for government intervention to free up small business capital. I believe the CDFI program and the SBA are critical to helping many businesses here in Vermont rebound, and I told the President and members of Congress that during deliberations over the Recovery Act and I will tell them again during discussions over the upcoming Jobs Bill and next year’s budget. These programs are not magic bullets to fixing the entire economy, but they do focus like a laser beam on small business people and entrepreneurs that form the life blood of Vermont’s economy.”
During consideration of the Recovery Act, Leahy wrote to President Obama and members of Congress urging inclusion of CDFI funds in the bill to help provide relief to small businesses desperately searching for capital. Earlier this month, Leahy heralded President Obama’s decision to more than double funding for the CDFI in next year’s federal budget.
“The Recovery Act gave VCLF and our clients access to new capital,” said VCLF Executive Director Will Belongia. “The Recovery Act will enable us to make more than $10 million in loans in the coming years – loans that banks might find too risky or that don’t fit neatly into their loan portfolios.”
Belongia said the new funds have already allowed VCLF to make more than seven loans. Representatives of five businesses that have received Recovery Act VCLF CDFI-funded loans were on hand Friday including Bradford Veneer and Panel, Terry Precision Cycling of Burlington, High Mowing Organic Seeds of Wolcott and the Rutland County Parent Child Center. One VCLF SBA Micro-Loan Program Recipient was represented Friday, Jeff Locke Trucking of Albany, Vt.
“The SBA approved VCLF as a new SBA microlender based on its successful record in delivering microloans statewide to startups and early stage small businesses,” said SBA Vermont District Director Darcy Carter.
Last year Leahy, Senator Bernie Sanders and Congressman Peter Welch announced that three Vermont CDFI organizations, VCLF, NeighborWorks of Western Vermont and Opportunities Credit Union each received a $2 million Recovery Act CDFI award. These awards, amounting to $6 million, represented a substantial percentage of the $90 million available in Recovery Act funding. Both NeighborWorks of Western Vermont and Opportunities Credit Union offer regionally available loan funds for varying opportunities, from homeownership opportunities to small business lending.