September 2005  Issue No. 23                    REAP HOME PAGE         A publication of the Center for Rural Affairs

Rural Enterprise Reporter

Direct Loan Program Strong

The REAP Direct Loan Program had an excellent year in Fiscal Year 2005. In 1998 we saw the need to serve businesses who had used the REAP Peer Loan Program but had grown beyond those loan levels. We also had new microentrepreneurs with needs beyond those that could be met by Peer Loans. As a result, the REAP Direct Loan Program was created.

Direct Loans became permanent in 2000. In the past fiscal year, REAP placed 29 Direct Loans totaling $311,850. These loans and extensive client technical assistance also leveraged over $1,379,235 in additional debt financing from traditional lenders, other revolving loan funds, and private sources. Since their inception, REAP has placed 170 Direct Loans totaling $2,295,258.

The REAP Direct Loan Program is helping to leverage other funds. As part of REAP’s technical assistance services, our staff provides business planning services to REAP members. These services have resulted in leveraged lending in many instances.

In many cases a REAP client completed their business plan in consultation with their area REAP Business Specialist and then 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 in addition to REAP’s loan fund. Historically, REAP has “leveraged” loans totaling $5,516,055.

We are 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.

We look forward to adding additional lending products to our current product mix in the future. Current REAP lending products can be viewed online at http://www.cfra.org/reap/loan_programs.htm .

Contact: Jeff Reynolds, REAP Program Director at 402.656.3091 or jefff@alltel.net for more information.

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Center for Rural Affairs -- Rural Enterprise Assistance Project
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