MONTPELIER, Vt. – Small Business Administration microloans funded throughout Vermont increased significantly in 2013 with 41 microloans worth more than $688,000.
As a result, microloan recipients were able to create and retain more than 120 Vermont jobs.
The 2013 microloans exceeded both the volume and value from the previous two years combined. From Jan. 1, 2011 to Dec. 31, 2012 Vermont microloan intermediaries funded 30 microloans totaling $680,564.
“Vermont’s SBA microlenders are helping the state’s underserved communities access loans at reasonable rates and terms,” said Darcy Carter, SBA Vermont District Office Director.
Microloan intermediaries are nonprofit community-based organizations with experience in lending. They administer the SBA Microloan Program by providing direct loans up to $50,000 to small business owners who are often startups or early stage microenterprises. Vermont has three microloan intermediaries in the state. Community Capital of Vermont in Barre and Vermont Community Loan Fund in Montpelier serve the entire state, while Northern Community Investment Corporation in St. Johnsbury serves Essex, Orleans and Caledonia counties.
“I think that our increase in SBA microloans really stems from a better understanding in 2013 of how we can leverage SBA microloan dollars with other private capital sources. In addition, we got much more attuned to how small businesses could better use the SBA microloan product to accomplish their business objectives,” said Will Belongia, Vermont Community Loan Fund Executive Director.
Microloans can be used for working capital, inventory, furnishings, equipment and more. The maximum repayment term allowed for an SBA microloan is six years. In addition to lending, intermediaries also offer technical assistance.
“Eighty percent of our loans are to start-up businesses and many need technical assistance,” said Martin Hahn, Community Capital of Vermont Executive Director. “Our technical assistance program is designed to help new entrepreneurs with financial management, marketing and inventory management, so their dream can become a reality.”
A wide variety of business received microloans in 2013, including a certified public accountant, marketing consultant, filmmaker, furniture maker, restaurateur and several others.
“Vermont’s economic strength is the diversity of small businesses,” said Belongia. “These small businesses need access to both smaller amounts of capital and the resources and assistance VCLF can provide. The SBA Microloan Program allows us to spend the time with an entrepreneur seeking out both the capital solutions as well as the capacity solutions that are critical to business success.”
For more information, call a Vermont microloan intermediary or visit www.sba.gov/vt.