Rural Enterprise Reporter
Direct Loan Program
This new REAP loan product fills a
gap in capital access for microbusiness.
REAP saw in 1998 the need to serve businesses that had used the
Peer Loan Program but had grown beyond those loan
levels. REAP also had new microentrepreneurs with needs beyond
those that could be met by Peer Loans.
REAP Direct Loan Program became a permanent part
of REAP in 2000. In the past year, REAP placed 26 Direct Loans
totaling $351,756. These loans and extensive client technical
assistance also leveraged over $244,260 in additional debt
financing from traditional lenders, other revolving loan funds,
and private sources. Since inception of the Direct Loans, REAP
has placed 60 Direct Loans totaling $811,898.
The REAP Direct Loan Program is helping to leverage other funds.
REAP’s business planning services with members have resulted in
leveraged lending in many instances.
There have been many cases where a REAP client has completed a
business plan in consultation with the area REAP Business
Specialist and has secured a loan from a traditional lender,
development district, community action agency, or a local loan
REAP staff have also helped in “packaging” loans that would
include other lenders in addition to REAP’s loan fund. Since
2000, REAP has generated 39 “leveraged” loans totaling
REAP continues to be extremely satisfied with the performance of
these loans. Microbusinesses have microloan needs as small as
$100 to as large as $25,000 or more.
It has always been REAP’s goal to meet the debt financing needs
of all members – individually or by collaborating with partners.
The REAP Direct Loan Program is meeting this need most