Less than $300,000 of $17 million in loans intended to help small businesses in the South recover from the COVID-19 pandemic have gone to SC businesses, and organizers of the economic recovery fund want business owners company know that more money is available.
The Southern Opportunity and Resilience Fund, designed to fill gaps left by government pandemic relief, had taken out 357 low-interest loans through community lenders in January. Ten of them, totaling $291,000, were deployed in South Carolina, with six loans funded in the Midlands.
“We’re excited to spread the word to more companies, especially in South Carolina, because we haven’t had as much demand there as we thought,” Caroline Yarborough, head of syndications and strategy at Calvert Impact Capital, told the Columbia Regional Business Report. “We know there are plenty of businesses across the state that would benefit from a program like this.”
Working across local and national Community Development Financial Institutions, the SOAR Fund provides loans of up to $100,000 and free business support to businesses or nonprofits with 50 or fewer full-time employees in Alabama, Arkansas, Delaware, Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia, and District of Columbia. Eligible applicants are matched with lenders to receive a share of a capital pool funded by philanthropic, private and corporate investors that has reached $62.5 million with recent support from the Visa Foundation, Compton Foundation and of the WK Kellogg Foundation.
Non-profit financial affiliate Calvert Impact Capital is helping organize the dispersal of the fund, managed by LISC Fund Management. Thirteen CDFIs originated loans purchased by the fund, Ascendus, NDC and Opportunity Fund serving South Carolina.
“At this critical time, CDFIs have been a lifeline for small business owners, especially women and people of color, in rural and urban communities where many are underfunded and excluded from COVID-19 relief. essentials,” Cynthia Muller, director of mission investing at the WK Kellogg Foundation, said in a press release. “The SOAR Fund has merged a vibrant network of trusted lenders across the South and Southeast who are rapidly deploying flexible capital to reinvent a fairer economy for all.”
NDC worked with Sky station gift shop in Rock Hill to arrange a loan which the company used to renovate its storefront, purchase new merchandise and buy more displays.
“The reason I liked this loan is because of the interest payments for a year,” co-owner Tami Windell said in the statement. “I worked with NDC to design a loan that I could afford to repay.”
Windell represents one of the underrepresented groups of business owners the fund aims to reach. A November 2021 study by a consortium of small online businesses Alignable found that 49% of minority-owned small businesses said they were unable to pay rent that month.
Of the $11 million in SOAR loans issued to nearly 250 small businesses in November 2021, 79% went to business owners who identified as a woman or person of color, while 49% went to black-owned businesses. Nearly 90% went to businesses with 10 or fewer full-time employees, and 76% of recipients reported annual earnings of less than $500,000.
“In all states served by SOAR, there has been historic divestment from communities, so it is very important to ensure that businesses that do not have access to traditional banking sources or were not eligible for a PPP loan or other relief—programs like this get access to the capital they need because it’s often the businesses that need it the most,” Yarborough said. “It’s often the businesses that don’t ‘don’t have a network of family members who can help them during a difficult time or don’t have a savings cushion that can support them in the event of a major gap in their income.
The SOAR fund has distributed loans to restaurants, childcare centers, health service providers, agricultural produce farms, entrepreneurs and retailers, among other beneficiaries.
“The pandemic-related dispersions have been diverse across companies,” Yarborough said. “It could be a new Plexiglas contraption that a business owner needs to install in their store to be able to offer assistance, or it could be an additional means of transport for employees in due to COVID precautions. The needs of companies right now are really varied, but the flexibility of the SOAR fund has been really beneficial.
Applications and more information are available online at www.TheSoarFund.org, and Yarborough anticipates increased interest as other relief programs, such as the Paycheck Protection Program and the U.S. Small Business Administration’s COVID economic disaster loans, begin to deplete their funds.
“We expect demand for SOAR loans to increase as other stimulus programs end,” she said. “We saw PPP come in the summer and so we saw less demand for SOAR loans because PPP was such a big opportunity for business owners, but as companies turn to assessing what they need over the next year to five, I think SOAR is a really good fit. That’s why we work so hard to spread the word, because we want to make sure companies know it’s an option. The rates are affordable and there’s a 12 month interest only period, so it’s really designed to give business owners time to get back on their feet.
Initial support for the SOAR fund came from Capital One, Ceniarth, the Chartrand family based in Jacksonville, Florida, the David and Lucile Packard Foundation, the FB Heron Foundation, Fidelity Charitable with support from CapShift, the Grove Foundation, Heifer Foundation, JPMorgan Chase, Mercy Investment Services, Microsoft, Ms. Foundation for Women, clients of North Berkeley Wealth Management, Winrock International and Woodforest National Bank.
Free technical business assistance is provided by organizations such as Winrock International, local offices and the National Rural Program of LISC, and Small Business Majority, which helps with outreach, education and practical business advisory services. .
“It’s definitely the silver lining, that programs like this are now directly connecting business owners to the resources they need,” Yarborough said. “Even though this connection has evolved during the crisis, we hope it will be there in 10, 20 years, which could be truly transformational in serving businesses.”
Contact Melinda Waldrop at 803-726-7542.