Update regarding the NC COVID-19 Rapid Recovery Loan Program

From: Scott Hamilton
Sent: Tuesday, May 19, 2020 12:15 PM
To: Golden LEAF Board of Directors
Subject: Update regarding the NC COVID-19 Rapid Recovery Loan Program

Greetings:

Late yesterday evening, Chairman Biggs and I received the attached from the Office of Governor Cooper. In this letter, the Governor shares his support for the loan program as well as his support of the General Assembly intent that these funds be used to support historically underutilized businesses.

I am writing to share an overview of the activities that have been underway since the program’s launch in March as well as the additional steps we are taking to ensure the program is meeting the intent. As with our prior small business loan programs activated following a disaster, this program is designed to provide loans to businesses that are unable to access other available federal or commercial options or have more immediate needs while they work through federal or commercial processes.

Each week, since mid-March, Golden LEAF and the Rural Center participate in a Business Recovery Collaborative call organized by the Department of Commerce. The purpose of this call is for state agency and nonprofit partners to share updates regarding COVID-19 recovery. Participants include the Small Business Center Network (SBCN), the Small Business and Technology Development Center (SBTDC), the Office of Historically Underutilized Businesses within the Department of Administration, the Economic Development Partnership of NC (EDPNC), and the Small Business Administration (SBA). The Institute (formerly the Institute of Minority Economic Development), a named partner in the recent legislation, has been invited to participate as well.

When the program launched at the end of March, we asked this Collaborative as well as all 170 members of the General Assembly to share information regarding the program with their networks and constituents.

Golden LEAF and the Rural Center regularly participate in webinars for interested businesses and stakeholders regarding the program. Most recently, we have participated in webinars hosted by legislators and nonprofits with the goal of reaching minority-owned small businesses. We will continue to offer to participate in these as an effective strategy for reaching businesses.

Of the businesses in the program, 42 percent are female, 19 percent are black or African American, 5 percent are Asian, and 14 percent other, multiple, or prefer not to disclose their race. This data shows the program is more diverse than comparable statewide small business data.

Although this data shows that we are reaching historically underutilized businesses in the application stage, we are working to ensure that the loans approved are representative as well. The program intentionally works with established nonprofit lenders (CDFIs) who exist for the purpose of providing loans to underserved businesses across North Carolina, including women- and minority-owned small businesses. Three of the seven lenders in the program are minority-led institutions with a focus on serving minority-owned small businesses.

The legislation enacted earlier this month enables use of funds in the program for technical assistance. The Rural Center will work with state and other nonprofit partners to leverage existing technical assistance services to support applicants in this loan program. The Rural Center is specifically reaching out to nonprofit partners with experience in providing technical assistance to historically underutilized businesses to lead in this effort. These assistance partners will also be tasked to follow up with applicants that are nonresponsive or that submitted incomplete applications.

Our goal is to ensure that all businesses, but especially those eligible historically underutilized business applicants in the pipeline have the support they need to be successful in the underwriting process, whether through more direct support in filling out the application, developing profit and loss statements, or providing other elements of a business plan to document ability to repay.

We are also committed to transparency. In addition to the reports required in the legislation, we are working on enhancing the loan program website to include regular updates regarding the outcomes of the program. I have also invited Rural Center President Patrick Woodie to provide an update on the program at the June 4 meeting of the Board.

As always, please do not hesitate to let us know any questions or concerns.

With thanks.

Scott

Scott T. Hamilton
President, Chief Executive Officer

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