Expansion in microlending to aid startups, small firms
Northern Nevada Business Weekly
Expansion of a microlending program in rural Nevada is expected to give a boost to startups and expanding small businesses.
Several rural businesses in northern and central Nevada already have tapped the microlending program for small businesses, and dozens more have applied for loans ranging between $500 and $50,000, says Ferrel Hansen, chief executive officer of the Rural Nevada Development Corporation.
The nonprofit previously operated a much smaller microloan program.
The Rural Microentrepreneur Assistance Program, instituted in January by the U.S. Department of Agriculture, provided the RNDC with a $500,000 loan and a grant of $103,000 for financial and technical assistance to help small rural business.
The Nevada development corporation was among the first selected nationwide to participate in the program.
To qualify for a RNDC loan, Hansen says, companies must have fewer than 10 employees, have less than $1 million in annual sales, and create jobs. The number of new jobs – or jobs to be saved – required depends on the level of funding by the non-profit development corporation headquartered in Ely. Additionally, companies must have been denied credit from traditional commercial lending sources.
Mary Kerner, a lending administrator for RNDC, notes that the microlending program includes financing of startup businesses that are highly unlikely to get traditional bank funding.
“We have had a really good response given the marketing and advertising that these funds have created,” Hansen says. “We do have funds available, but we have seen an increase in demand since the press releases and marketing of the program went out through the USDA.”
The RNDC has dispersed about $100,000 in loans between four businesses including one in Lyon County, and another in White Pine County. The RNDC expects to be able to receive another allocation of funding once it disperses the full $603,000 it has available.
“We are looking at completing another application for additional funds because of increased volume we have seen in our programs,” Hansen says.
The average RNDC loan amount is about $10,000. Small rural businesses can apply for a microloan by contacting the Rural Nevada Development Corporation at rndc.org and following the link to the company’s lending programs, or by calling 775-289-8519.
Businesses in the Reno-Sparks, Carson City and Las Vegas metropolitan areas are excluded from the program.
“These programs are designed to finance business that otherwise can’t get credit from a traditional lending institution,” Hansen says.