New program gets $15mn to diversify Appalachia
The group recently established Appalachian Community Capital (ACC), a wholesale bank that can lend money to small businesses without the capital requirements or lending restrictions of traditional banks. The bank has already already been approved to lend participating community groups \$7mn of the more than \$15mn in funds that have been pledged. It expects to get clearance to disburse 90pc of the committed capital by October.
The Appalachian Regional Commission gave \$3.45mn to the ACC, while Bank of America, Deutsche Bank, Calvert Fund and the Ford Foundation are providing \$12mn in debt and equity. The first round of capital commitments is expected to be enough to make loans to 165 businesses and create 790 new jobs.
"Enhancing access to capital is critical to supporting the economic redevelopment of rural communities, especially those impacted by declining coal production," managing director of community development at Bank of America Dan Letendre said.
Loans from the ACC are intended to help small businesses in economically distressed parts of Appalachia amass enough capital to grow to the point at which they could qualify for more traditional bank loans, entrepreneurial development director at the Appalachian commission Ray Daffner said. Rural Kentucky, West Virginia and southern Virginia have been particularly hard hit by coal layoffs and small businesses in those areas can have a difficult time getting loans from traditional sources, Daffner said.
The commission is also part of an effort announced by the White House last month to provide \$35.5mn in grants to Appalachian communities.
M-Rock Stone Manufacturing in Peterstown, West Virginia, is among the companies in the process of getting a loan using the ACC. The company manufactures veneered stone and rock used for building materials and hopes to double its staff to 30 because of the loan.
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