Banking & Finance

New Program Lends To Pandemic-affected Small Businesses And Nonprofits

By Jenny Callison, posted Sep 29, 2021
A new loan program funded by 13 Community Development Financial Institutions (CDFIs) in the southern U.S. is making low-interest loans to small businesses and nonprofits that have been adversely affected by the COVID-19 pandemic.
The Southern Opportunity and Resilience (SOAR) Fund launched in June and will remain in existence “for the foreseeable future,” according to the program’s website. The collaborating lenders’ goal is to make a total of $150 million available to fund loans of up to $100,000 each.

Thus far, the program has been funded by $95 million from Truist, said Abby Guerra Capote, a CDFI business lender involved with SOAR.
Organizations in 15 Southern and Southeastern states as well as in Washington D.C. are eligible to apply. Capote works with Raleigh-based Partner Community Capital, which is the CDFI working with SOAR applicants in North Carolina, Maryland and West Virginia.
To date, Capote has received 47 applications from North Carolina small businesses and nonprofits, of which roughly 90% are from east of the Triangle, she said. Applicants have requested a total of $2.8 million, of which Partner Community Capital has made $600,000 in loans.
According to the program’s website, “The SOAR Fund was created by community lenders in the Southern and Southeastern United States to provide economic recovery loans and free business assistance to small businesses and nonprofits at a time when they are facing unprecedented health and economic challenges.”
Loans can be used for working capital, inventory, marketing, refitting for new social distancing guidelines, operating and emergency maintenance, property taxes, utilities, rent and supplies. They are designed to reach the smallest of small businesses and nonprofits, including historically underserved businesses, those in low-income and rural communities and businesses owned by women and people of color. 

To qualify for a SOAR loan, small businesses must employ 50 or fewer full-time-equivalent (FTE) employees, have earned gross revenues of less than $5 million per year and must have experienced a direct economic disruption as a result of COVID-19.

Nonprofits must employ 50 or fewer full-time (FTE) employees, be a 501(c)(3) or faith-based organization providing direct services, have an annual operating budget of less than $5 million and have suffered a direct economic hardship as a result of COVID-19 in a way that materially impacts their operations.  

There is also a requirement that the business or non-profit must have been in operation since at least September 2019, with some exemptions.
“Applicants have to have sufficient cash flow up-front to make18 months of payments,” Capote said, adding that applicants must also be able to demonstrate at least three months of pandemic-related impact by providing year-over-year numbers.
For full details on SOAR and to apply, click here.
The cover story in Friday's issue of the Greater Wilmington Business Journal delves into government-funded programs that have helped area businesses and nonprofits weather the effects of the COVID pandemic.
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