September 2002  Issue No. 20                    REAP HOME PAGE         A publication of the Center for Rural Affairs

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 REAP 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.

The 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 fund.

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 $1,895,260.

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 effectively.

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Center for Rural Affairs -- Rural Enterprise Assistance Project
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