Grant: $2,000,000 - Community Development Financial Institutions - Jun. 29, 2009
40% voted satisfied - 60% voted not satisfied - 5 vote(s) cast
Award Description: SCC is requesting $2 million in Financial Assistance to expand its lending activity to include a rural retail financing initiative throughout Tennessee with emphasis on communities participating in the Tennessee Main Street Program, which are certified as being in need of assistance with the revitalization of their downtown and Central Business Districts. The FY2009 Financial Assistance Award allows SCC to expand its lending activities in underserved non-metropolitan areas of the state through the creation of a rural retail lending initiative. While this initiative will serve a wide range of economically distressed areas throughout Tennessee, the emphasis of SCC?s expanded lending will be placed on the rural communities that are participating in the Tennessee Main Street Program. These communities have been determined by the State of Tennessee to be severely economically distressed and in need of assistance to revitalize their downtown and Central Business Districts. Each community is also recognized as a CDFI Fund approved Investment Area. In 2008, SCC saw a dramatic increase in requests for financing and technical assistance for retail businesses. Requests totaling $8,756,600 to create, expand, or support retail businesses were received by SCC through its referral relationship with the State of Tennessee?s Small and Minority -Owned Business program. This unprecedented increase is most notable in rural areas where traditional financing sources are unavailable due to current market conditions. A majority of these requests are for less than $50,000, so in effect at a minimum the FA Award will allow SCC to fund at least 50 businesses in the first 3 years of deployment. SCC has increased its presence in rural areas with the opening of offices in Jackson and Kingsport and the creation of the Tennessee Rural Opportunity Fund (TN ROF). Since TN ROF Funds are leveraged with public funds from the state of Tennessee, there are restrictions on the types of businesses that can be financed, the amount of loans, and loan terms. As such, there are limited financing resources available in these rural other than conventional financing, which has all but gone away due to the credit crisis. The Financial Assistance award will allow SCC to expand its lending activities and fill the credit gap that currently exists for rural retail businesses throughout the state. SCC projects that the capital provided through the Financial Assistance Award will be 85% deployed within three years of its receipt, and fully deployed within four years. This is due to increased demand for rural retail financing and working capital over the next 36 months in SCC?s Target Market, SCC enhancing its presence in these markets through its new offices in Jackson and Kingsport, Tennessee, and increased marketing and community outreach resulting from the Technical Assistance award.
Project Description: The Southeast Community Capital Rural Retail Lending Initiative will provide financing for retail businesses throughout Tennessee with emphasis on communities participating in the Tennessee Main Street Program, which are certified as being in need of assistance with the revitalization of their downtown and Central Business Districts. This award will be a catalyst for change in the Central Business Districts ('Main Streets') of economically destressed rural communities by allowing SCC to provide financial and technical assistance to entrepreneurs. In order to successfully develop and launch this program, SCC has put the awarded CDFI monies into the following categories: Lending ($1.5 Million); Loan Loss Reserves ($250,000), and; Operational Costs associated with general operations and program launch ($250,000). As of September 30, 2009 no CDFI Fund monies have been expensed for program development or lending activities. However, SCC has undertaken management activities related to proposed program activities, which include coalition building, meetings, and outreach with current and potential partner organizations such as the Tennessee Department of Economic and Community Development and the Tennessee Main Street Program; marketing strategy development; and program development. These activities, while central to program development, have been paid for with SCC funds and have not been expensed to CDFI Fund monies.
Jobs Summary: No jobs have been created, as project monies have not yet been expended by SCC. (Total jobs reported: 0)
Project Status: Less Than 50% Completed
This award's data was last updated on Jun. 29, 2009. Help expand these official descriptions using the wiki below.