If you’re an entrepreneur looking to borrow money to start or expand a business, good luck with most traditional lenders.
“Right off the bat, a bank is going to look at your credit score,” says Lenwood V. Long Sr., president and CEO of The Support Center. “If you’re not 700 or 750, you can’t even sit at the table.”
Long should know. His Raleigh-based nonprofit started making business loans in 2009 that banks and other lenders would likely reject. So far, those loans have totaled more than $11 million, with about $2.6 million going to business owners in the Charlotte area.
Now The Support Center is looking to do even more in Charlotte.
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It recently signed an agreement to help market the Charlotte Community Capital Fund, which was established in 2003 to help local small businesses gaining access to capital.
Under that program, the city partners with major banks and foundations to provide an 85 percent loan guaranty for business loans made by the Self Help Credit Union and now The Support Center. Because the loans are guaranteed, the lenders can use more flexible underwriting.
“We’re one of the better kept secrets in North Carolina in terms of the work we do with small businesses,” Long said in a recent interview.
The Support Center makes loans up to $250,000, with an average between $65,000 and $70,000.
“We look at the total borrower – credit score, payment history, business plan, financials,” Long said. “We take all those factors into consideration. And if the picture shows potential, then that’s a borrower we can work with.”
Long said the organization is especially committed to “underserved” groups and communities.
“Truth be told, we do know that people of color and women-owned business tend to have more difficulty accessing capital than the mainstream small businesses,” he said.
The center even makes loans for start-ups.
The Charlotte Community Capital Fund is by no means the only organization offering loan guarantees or cash (typically low-interest loans) to The Support Center. It also gets funding and/or loan guarantees from banks and the federal government, including from the Small Business Administration and the departments of Agriculture, Energy and Transportation.
Despite making riskier loans, Long said The Support Center’s default rate is about 5 percent. That rate would be closer to 2 percent, he said, but for one large loan that went bad in Eastern North Carolina.
Although The Support Center has been making loans in Charlotte since day one, it stepped up its efforts about two years ago when it opened an office here. Now with its contract with the Charlotte Community Capital Fund, Long said, it is looking to become even more visible.
In recent weeks, the center’s Charlotte representative has been meeting with organizations such as the Central Piedmont Community College Small Business Center, the Minority Contractor’s Association and the Minority Supply Council of the Carolinas.
“We’re doing a number of things with the right groups to make sure they are aware of this program,” Long said.