Cabinet for Economic Development
Governor Beshear Encourages Entrepreneurship, Small Business Growth with Expansion of Kentucky Micro Enterprise Loan Program
Program will provide services to 25 Kentucky counties currently without access to microloans
BOWLING GREEN, Ky. (April 6, 2010) – Gov. Steve Beshear and Cabinet for Economic Development officials today announced the expansion of the Kentucky Micro Enterprise Loan Program, ensuring entrepreneurs in all 120 Kentucky counties will have access to a microloan program.
Until now, 25 counties, primarily in western Kentucky, did not have local access to a microloan program, which provides financing up to $35,000 for entrepreneurs and small business operations that, in most cases, would find it difficult to obtain conventional funding.
“My administration is committed to growing small businesses across the state, and it’s vital that small businesses and entrepreneurs in every Kentucky county have access to funding to start or expand their business,” said Gov. Beshear. “Small businesses are the backbone of our economy and this program will have a positive impact on the communities that previously had no access to a local microloan program.”
Funded by a one-time state allocation of $125,000 from the Kentucky Economic Development Finance Authority (KEDFA), the expanded loan program will be administered by Community Ventures Corporation (CVC), a private, nonprofit community and business development organization, from their regional office in Bowling Green.
The program will be structured similar to a 16-month pilot Kentucky Micro Enterprise Loan Program that was started in 2007, and was also administered by CVC. CVC will leverage state funding to obtain additional federal loans from the U.S. Small Business Administration (SBA).
The 2007 pilot program, which started with an initial, one-time investment of just over $500,000, leveraged state funds to obtain $1.5 million in federal funding from the U.S. SBA. With these funds, the program made more than $300,000 in microloans during the pilot period; established a new office in Louisville; provided one-on-one business counseling and training to hundreds of entrepreneurs; and achieved a loan default rate of approximately 4.6 percent. Because of the leveraged funds, CVC continues to make loans even after the pilot program ended in June 2008.
“With these funds, we can be assured that all of Kentucky’s counties will now be a part of its economic success,” said Kevin R. Smith, president and CEO of CVC. “We look forward to expanding opportunities in these counties and providing necessary capital for innovation throughout the region.”
Through the expanded loan program, CVC will make micro-loans available to qualified businesses in the following counties: Trigg, Lyon, Livingston, Crittenden, Caldwell, Christian, Todd, Muhlenberg, Hopkins, Ohio, Butler, Logan, Simpson, Warren, Allen, Barren, Grayson, Hancock, Breckinridge, Meade, Nelson, Henry, Trimble, Carroll and Owen.
The Cabinet for Economic Development routinely works with small business organizations from across the state to provide resources, advocacy and assistance to small and minority businesses. For more information about the Kentucky Micro Enterprise Loan Program and the cabinet’s other small business programs, visit www.ThinkKentucky.com.