Bank of America Grant Helps Mercy Corps Northwest Tap Low Cost Funds to Support Local Entrepreneurs
PORTLAND, Ore. – June 13, 2012 – Mercy Corps Northwest (MCNW), the U.S. economic development office of global humanitarian organization Mercy Corps, today announced it received $37,500 from the Bank of America loan loss reserve grant program.
Approximately 25 Northwest businesses expected to benefit from new access to SBA capital.
The funding allows MCNW to access $250,000 in lending capital from the Small Business Administration (SBA) to provide loans under $10,000 to entrepreneurs in Oregon that may not have access to traditional capital, including startups and low-income borrowers. MCNW estimates it will be able to make 25 new microloans to small businesses and start-ups with this initial round of funding from Bank of America. These new businesses add new products, jobs, revenue and services to the community, with each MCNW microloan borrower creating an average of 1.7 jobs.
The SBA capital marks a significant expansion of MCNW’s existing microloan program. The average microloan is approximately $11,000 per business, but loans are available for up to $50,000 at an 8-12% fixed interest rate. Loan terms will vary according to the size of the loan, the planned use of funds, and the needs of the small business borrower. Borrowers also benefit from technical assistance in the form of classes and one-on-one counseling.
“SBA’s Portland District Office is pleased that Mercy Corps Northwest has been able to expand its microloan program with the use of SBA funds,” says Robert DuCote of the U.S. Small Business Administration. “This intermediary funding is intended to facilitate small business growth for a number of local entrepreneurs by boosting their respective access to working capital and enabling the purchase of inventory, supplies, machinery, equipment, furniture or fixtures.”
Microlenders like MCNW help drive economic development by channeling low-cost federal loans to small businesses across the U.S. In past years, however, federal funds for small business microloans have gone unused because the lenders have been unable to meet required loan loss reserves — up to 15 percent of the amount borrowed —to access the capital.
As the nation’s largest lender to community development financial institutions, with more than $1 billion invested with 120 CDFIs in 37 states, Bank of America recognized the critical role CDFIs play in revitalizing local economies and created this grant program to quickly provide CDFIs with access this capital to spur local economic growth. Since 2010, Bank of America has provided more than $10.5 million to these micro-lenders across the country, enabling them to access more than $105 million in federal micro-capital, serving more than 9,100 local businesses and helping create and retain more than 14,300 jobs.
“Helping strengthen small businesses and new start-up companies stimulates job creation and is critical to our region’s economic growth,” said Roger Hinshaw, Oregon and Southwest Washington Market President for Bank of America. “Bank of America is empowering these entrepreneurs by directing private sector capital to unlock exponentially greater amounts of federal dollars for their businesses—creating a ripple effect that impacts job growth, spending and overall economic expansion here in Oregon.”
“This Bank of America loan loss reserve grant enables us to provide hard-working entrepreneurs with SBA capital that is crucial to starting and growing their small businesses in Oregon,” says Scott Onder, Lending and Strategy Manager at Mercy Corps NW. “This is a great example of a private-public partnership that leads to immediate economic development impact among populations that need it the most.”
Small business owners who are in need of capital to start or grow their business can learn more and apply for a loan at http://www.mercycorpsnw.org/lending.
About Bank of America
Bank of America is one of the world’s largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,250 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
About Mercy Corps Northwest
Mercy Corps Northwest is the U.S. economic development office of Mercy Corps, the Portland-based international relief and development agency. Globally Mercy Corps works amid disasters, conflicts, chronic poverty and instability to unleash the potential of people who can win against nearly impossible odds. Since 1998 MCNW has supported the development of low-income small businesses, promoting self-sufficiency, healthy communities and contributing to the regional economy. For more information, go to http://www.mercycorpsnw.org.
About U.S. Small Business Administration
The U.S. Small Business Administration (SBA) helps small business and entrepreneurs start, grow and succeed, by providing access to capital, business counseling, and federal contracting assistance to small business owners and entrepreneurs. SBA also provides disaster assistance in the form of loans to businesses of all sizes that have been impacted by disasters including hurricane, tornado or storm damage. SBA’s Office of Advocacy assesses the impact of regulatory burden on behalf of small businesses, and conducts research on American small businesses and the small business environment. For more information, visit http://www.sba.gov.