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Revolving Loan Fund works to eliminate poverty and hunger one microloan at a time

Article by Mike Kelley with
Huntsville, Alabama – October 10, 2014

You’re a small entrepreneur with a dream. A small loan would help get you get there, but your bank is not interested in your vision. Who do you call?
The Neighborhood Concepts new Revolving Loan Fund may be your answer. Tailor-made for small start-ups or small businesses needing a microloan to expand, the new program makes “microloans,” from as little as $2,500 to as much as $100,000.

A business loan for $2,500? Try getting your banker interested in that.

Launched in 2012 with $300,000 in seed money from the Food Bank of North Alabama, the North Alabama Revolving Loan Fund has so far helped nine north Alabama businesses with loans totaling about $175,000.

It’s an innovative program, to be sure, but Neighborhood Concepts Executive Director Mary Ellen Judah sees it as just a normal extension from decades of developing affordable housing to strengthen neighborhoods.

Judah says the Food Bank-funded program has specific requirements before a loan is granted. The business receiving the loan should either:

  • support a local healthy food economy,
  • create or retain jobs for low-to-moderate income persons,
  • or provide needed services in under-served neighborhoods.

“We try to support start-up businesses that could not qualify for bank loans,” Judah says. “We want to make an impact on eliminating poverty and hunger in this area.”

The program got a shot in the arm earlier this year when the City of Huntsville contributed an additional $250,000 in loan fund capital. We try to support start up businesses that could not qualify for bank loans.”

Judah says A Cup of Everything, a small coffee and wine-tasting shop on the north side of the square in Huntsville, typifies the type of business NARLF tries to help. Business partners Helen Gillespie and Mary Lambert cashed in retirement funds to set start-up capital, but still needed less than $50,000 to finish the build-out of their space, buy equipment, and stock some inventory.

That small loan from the fund helped A Cup of Everything get off the ground. And business is good. “We’re growing. Revenues are increasing every month,” Gillespie said.

Other recent loan recipients include:

  • Laura Hester of Florence, whose Red Gingham Gourmet cornbread operation needed a microloan to purchase a specialized piece of equipment. Her expanded business now supplies frozen cornbread muffins to several supermarkets and Walmarts in the Shoals area.
  • Jason Lafferty, who converted an old school bus into The Food Fighter Bustaurant. “He’s a young guy really doing well, with a growing business” Judah said.
  • Charlie Horton needed less than $25,000 to purchase a piece of machining equipment for his company, G3 Machining in Huntsville–a veteran-minority owned tool-grinding company.

Judah says the loan process is simple and quick, but she cautions that loan applicants should have a solid business plan and show real commitment to the business. “We like to see a willingness to invest your own money first,” she said, “and be a business that will create jobs in the community.”

To Helen Gillespie, that small loan made all the difference. “Without that loan I simply would not be in business,” Gillespie said. “They’re a hand-up, not a handout.”

Article on by Mike Kelley