Despite the credit crunch, North Carolina’s community credit unions are eager to lend
In a tight lending market, especially for borrowers without a strong credit history or substantial collateral, the NC Minority Support Center is spreading the word that it has money to lend to small businesses.
“It bothers me when I hear of businesses saying they don’t know where to go [for a loan],” said Roberta McCullough, the MSC’s Financial Services Director. “That should never happen in this country. People should have options.”
The agency, in partnership with six community development credit unions across the state, is looking to help business owners seeking loans of $50,000 or less, an amount that doesn’t interest many big banks. Over the past 20 years, the credit unions have loaned over $8 million to small businesses.
The Durham-based NCMSC and its credit unions support small businesses that may be too small to go to a bank. It’s borrowers include landscapers, barbers, bakers, hairdressers and day care operators.
Despite the poor economy, McCullough is upbeat about lending to people who want to expand their business or start a new one.
“This is a great time to start a business, especially for those who have been unemployed for a year or more. They have nothing to lose,” she said.
Nastassia Hewitt received a loan through one of the community credit unions, Generations CCU, to start her new business, Remedy Hair Salon and Spa in Durham. A year and four months after she opened, Hewitt said her business is succeeding because the loan gave her a head start on advertising and renovations.
Hewitt was surprised by the smoothness of the process and the amount she was qualified to borrow.
“I didn’t think it would be as easy as it was and I didn’t think that much would be available to me,” Hewitt said. “The fact that I could get some kind of support with the economy being what it is, that was impressive.”
Despite making allowances for credit problems, the default rate on CDC loans is very low, McCullough said.
The Support Center is supported by state funds and contributions from banks and foundations.
The founders of North Carolina community development credit unions were African American churches, school teachers and principals in segregated schools. The Support Center was officially created in 1990 to help the community development credit unions with regulatory issues and to stabilize operations and build their membership.
While the Support Center has focused on lending to businesses led by minorities and women, McCullough said it welcomes loan applications from anyone planing to launch or expand a small business.
For more information on how to obtain a small business loan, contact the NC Minority Support Center at 919.530.1683 or visit their website at www.ncmsc.org.