September 2003  Issue No. 21                    REAP HOME PAGE         A publication of the Center for Rural Affairs

Rural Enterprise Reporter

Direct Loan Program Grows
Demand for direct loans to REAP members continues to surpass previous records.

The REAP Direct Loan Program had a record year in FY 2003. In 1998 we saw 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 permanent in 2000. In the past fiscal year, REAP placed 38 direct loans totaling $577,663.

These loans and extensive client technical assistance also leveraged over $907,160 in additional debt financing from traditional lenders, other revolving loan funds, and private sources. Since inception, REAP has placed 101 direct loans totaling $1,433,508.

The REAP Direct Loan Program is helping to leverage other funds. As part of our technical assistance services, we provide business planning services to REAP members. These services have resulted in leveraged lending.

In many cases a REAP client completed their business plan in consultation with their 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 include other lenders. Since 2000, REAP has generated 68 “leveraged” loans totaling $2,909,420.

We continue to be extremely satisfied with the performance of these loans. Microbusinesses have lending needs as small as $100 to as large as $25,000 or more.

It has always been our 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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