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Banking & Finance

Economic recovery loan program to assist 15 states

Banking & Finance
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A group of community finance organizations is raising $150 million in capital to help small businesses and nonprofits in 15 states, including South Carolina, struggling to navigate and recover from the COVID-19 crisis.

The Southern Opportunity and Resilience Fund will provide economic recovery loans designed to reach the smallest of small business and historically underbanked organizations which have struggled to access capital from traditional sources, according to a news release. The fund will cover Alabama, Arkansas, Delaware, Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia and the District of Columbia.

“The COVID-19 pandemic has exacerbated an already uneven recovery from the Great Recession,” George Ashton, managing director at Local Initiatives Support Corp., which manages the fund, said in a news release. “Southern states had slower economic growth, lower labor force participation, and higher unemployment than the rest of the country, partially driven by the historic lack of corporate and philanthropic investment in the region. The SOAR Fund, with support from leading banks, foundations, and corporations, will tackle these issues head-on by addressing structural barriers to economic opportunity by providing capital to Southern small businesses and nonprofits that need it now.” 

The application portal, scheduled to open in April, will offer flexible loans of up to $100,000 to small businesses and nonprofits with fewer than 50 full-time employees. The fund replicates similar models in New York and California by working with and through local Community Development Financial Institutions.

Interested small business owners and nonprofits can review program eligibility and product terms and indicate interest at www.TheSoarFund.org. Once the application portal launches, eligible applicants will be matched with a participating lender that will assist the business owner with the application and provide advisory support. 

Catalytic initial grants and loans are being provided by Capital One, Microsoft, the F.B. Heron Foundation, Fidelity Charitable with support from CapShift, the Heifer Foundation, Mercy Investment Services, Woodforest National Bank, Ceniarth, and the Jacksonville, Fla.-based Chartrand Family, according to the release.

“We’re pleased to partner and invest in the Southern Opportunity and Resilience Fund with the goal to increase access to capital and support for underserved community businesses and nonprofits,” said Tahreem Kampton, Microsoft corporate treasurer. “Microsoft is committed to addressing racial injustice in our society, ecosystems, and communities. Many small businesses across the country and in our southern and southeastern states have struggled economically due to COVID-19. We are glad to support this collaborative effort to help provide opportunities in communities that have been historically underserved.”

Thirteen CDFIs will originate loans purchased by the fund, including Access to Capital for Entrepreneurs (ACE), Accion Opportunity Fund, Ascendus, BCL of Texas, Black Business Investment Fund, Communities Unlimited, LiftFund, NCIFund, NDC’s Community Investment Loan Fund, Pathway Lending, People Fund, Southern Bancorp Community Partners, and TruFund Financial Services. The CDFIs will be supported by technical assistance and business support organizations including Winrock International, LISC’s local offices and national rural program, and Small Business Majority, which will help with outreach, education, and hands-on business advisory services. Calvert Impact Capital is arranging and LISC Fund Management is managing the fund. 

“We encourage all small business owners and nonprofits who need support to visit the website, learn about the fund and sign up so you’re pre-registered once we launch the program,” said Patrick Davis, vice president of strategy at Community Reinvestment Fund, USA. 

Applicants can register online through CRF’s Connect2Capital platform when the fund launches. 

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