Grant funding has made it easier to fund your Nevada business. The Nevada Microenterprise Initiative (NMI), in partnership with its parent non-profit lender the Valley Economic Development Center Inc. (VEDC), has added $2 million to support its small-business loan program statewide.
Both NMI and VEDC will use the investment to target economic and community development in low to moderate-income communities. VEDC issues small-business loans ranging from $50,000 to $250,000.
“VEDC has been the lender of last resort for many good companies that have struggled during the economic downturn,” said Roberto Barragan, president and CEO of VEDC. “We are very happy to have this opportunity to bring our services and unique approach to small-business finance to Nevada entrepreneurs.”
Nevada is home to more than 221,000 small businesses, with 97.5 percent having fewer than 100 employees. But the current unemployment rate of 9.6 percent is causing more individuals to look to entrepreneurship to earn a living.
“A strong network of support is critical in ensuring a healthy, vibrant small-business community,” said Bruce Breslow, director of the Nevada Business and Industry Department. “We are pleased that NMI, in partnership with VEDC, is helping to fill the gap for businesses seeking access to capital in Nevada (with grant funding).”
VEDC is a non-profit small-business lender in Van Nuys, Calif. The center this year took over the struggling NMI, which also runs the Small Business Administration-affiliated Nevada Women’s Business Center and a statewide micro lending program that makes loans of less than $50,000.
The VEDC’s acquisition of NMI involved no cash; instead the VEDC assumed the initiative’s assets, creating a subsidiary based in Henderson.
VEDC, Southern California’s largest non-profit development company, has a portfolio of about 500 active loans worth $30 million. In a recent interview with the Las Vegas Business Press, Barragan said VEDC issues about $2 million in loans every month.
As a licensed community development financial institution, VEDC can borrow money at low bank rates to lend at higher interest rates, with much of its funding derived from bank grant funding. Banks worry about lending to higher-risk small businesses, so they refer those clients to VEDC.
The grant funding and referrals help banks fulfill their requirements under the Community Reinvestment Act, a federal law passed in 1977 aimed at encouraging banks to meet the needs of all borrowers in their communities, including low- and moderate-income neighborhoods. Businesses get the funding they need, and Nevadans can reduce the state unemployment level. This grant funding has a ripple effect of helping at least three different groups, and the economy is strengthened.
(Portions of this article are courtesy of The Las Vegas Review-Journal)