Houston-Galveston Area Local Development Council (H-GALDC)
Rural Enterprise Fund: A Micro-Loan Program for Rural Texas Entrepreneurs
Many business owners have a critical need for small loans to provide working capital, purchase inventory and equipment, and maintain cash flow during start up and expansion of their operations. Traditional lending institutions do not have loan programs to meet this important business need. This situation is especially apparent in small cities and rural areas.
Based on the belief that Small Business Development Centers play a very important role in building their communities and developing local businesses, and that a need for small, easily obtainable loans exist, the Houston-Galveston Area Local Development Council created a revolving loan fund to be used by rural Small Business Development Centers located within the 13 Counties surrounding Houston. These counties include, Austin, Brazoria, Chambers, Colorado, Fort Bend, Galveston, Harris, Liberty, Matagorda, Montgomery, Walker, Waller, and Wharton.
Loan Fund Parameters
• Unsecured loans available from $5,000 to $15,000
• Borrower must have been turned down by a local bank
• Borrower must be a Texas small business or sole proprietor
• 7 Year Loan Term
• Interest rate fixed at prime
• Minimum credit score of -630- required
• Packaging and credit analysis by local SBDC
• CDC staff will review deals and service loans
• CDC attorney will prepare loan documents
• Total funding available through the program for 2006, 2007, and 2008 is $150,000
Small Business Development Centers that qualify for the Local Development Micro-Loan Program include: Brazosport College SBDC in Lake Jackson, Galveston County SBDC in Texas City, UH Coastal Plains SBDC in Bay City, Prairie View A&M University SBDC in Prairie View, Lee College SBDC in Baytown, and Sam Houston State University SBDC in Huntsville.
Each SBDC that funds a minimum of two loans during the year will receive a $2,000 reimbursement to their general fund to cover overhead costs associated with the identification, analysis, and preparation of loan packages.
For more information contact James Walsh, H-GAC LDC Loan Program Manager, at james.walsh@h-gac.com or 713-499-6675.