HUD AWARDS $1.5 MILLION TO BOOST ECONOMIC DEVELOPMENT IN THE LOWER MISSISSIPPI RIVER DELTA REGION Loans to be made to small businesses in Alabama, Arkansas, Louisiana, Mississippi, Missouri, and Tennessee
WASHINGTON - U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro announced today that HUD is awarding $1.5 million to stimulate local economies, produce more affordable housing and boost job growth in the chronically underserved and undercapitalized Lower Mississippi River Delta Region. The funding is provided through the Delta Community Capital Initiative (DCCI).
San Antonio -based LiftFund, formerly Accion Texas, Inc. will receive a $1 million grant and Communities Unlimited and Southern Bancorp Capital Partners (SBCP), both located in Arkansas, will each receive grants of more than $200,000. These states will use this funding to increase lending to small businesses and entrepreneurs in eligible Delta regions. (See project summaries below).
"The Lower Mississippi River Delta plays a vital role in strengthening its regional economy and the entire United States," said Castro. "This funding will spur business development, create jobs and produce more affordable housing opportunities. HUD is committed to working with local leaders to help build communities that thrive."
Delta Regional Authority's Federal Co-Chairman Chris Masingill added: "We are excited to see much-needed resources coming to the Delta region to help our community institutions increase their investments into our small businesses and entrepreneurs, who in turn create the jobs that build our communities and improve the lives of the people of the Delta region. We take our role of being a strategic partner with HUD and our federal partners seriously; this is another example of federal partnerships empowering our communities and businesses to grow and compete in the global marketplace."
The Delta Community Capital Initiative ("DCCI") is a collaborative effort among three federal agencies - the Department of Housing and Urban Development (HUD), the Department of the Treasury - Community Development Financial Institutions Fund (CDFI Fund) and the Department of Agriculture – Rural Development (USDA-RD). The DCCI builds on the investments that strategic partner Delta Regional Authority (DRA)'s Small Business and Entrepreneurship Initiative has made to develop a pipeline of educated and skilled entrepreneurs and improve the climate for business growth. The DCCI will increase access to capital for business lending and economic development in the chronically underserved and undercapitalized Lower Mississippi River Delta Region. Specifically, it will provide direct investment and technical assistance to community development lending and investing institutions that focus on small business development to benefit the residents of Lower Mississippi River Delta Region.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
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Delta Community Capital Initiative Grantees
San Antonio -based LiftFund, formerly Accion Texas., a nationally recognized leader in the micro-lending industry and a certified CDFI, is awarded $1,000,000. This organization will provide micro and small business loans and financial training in several states including Alabama, Arkansas, Louisiana, Missouri, Mississippi, and Tennessee. Major activities include: conducting outreach; raising capital; and providing loans and business support services consisting of training and technical assistance to entrepreneurs in eligible Delta regions in Alabama, Arkansas, Louisiana, Mississippi, Missouri, and Tennessee over three years. Accion Texas will make available their full portfolio of loan products including microenterprise loans of up to $50,000 and business loans up to $250,000. Approximately 480 jobs will be created and 170 retained through disbursement of 495 loans totaling $7.2 million. Delta residents and business owners will benefit from educational training sessions, group and classroom technical assistance, and training on business and credit related topics. Approximately 350 participants will attend these trainings and sessions. Approximately 743 hours of one-one technical assistance will be provided. Proposed leverage for this project is $7.2 million.
Communities Unlimited is awarded $228,040. Communities Unlimited will expand access to capital for small businesses in the Arkansas Delta, which will lead to improved economic development opportunities in under-served communities and populations. Communities Unlimited also will assist 50 existing businesses; provide a minimum of 36 loans totaling over $300,000; expand services (both technical assistance and financing) to Delta small business owners; and secure sources of funding for existing services. A minimum of three partnerships will be formalized to facilitate and support loan origination throughout the target market during the project period. Communities Unlimited partner for this project is alt. Consulting. Proposed leverage for this project is $60,000.
Southern Bancorp Capital Partners (SBCP), is awarded $250,000 to expand its revolving loan fund to increase lending capital for small business in its non-metropolitan 19-county DRA-qualified market. SBCP's banking partner, Southern Bancorp Bank (SBB) is wholly owned by Southern Bancorp, Inc. (SBI). Both are also CDFI's. SBI will provide SBCP with 50 percent match up to $125,000, and SBB will provide SBCP with loan administrative capacity and underwriting support for the DCCI award. DCCI will enable SBCP to bridge the gap for small business owners and entrepreneurs unable to access capital through SBB or more traditional banking institutions. SBCP's capacity to provide flexible loans tailored to the needs of small business is supplemented by SBB's business and lending expertise and its broad outreach and referrals of nearly-bankable small business loans. With the help of DCCI, SBCP will be able to attract additional loan capital and thus deploy at least $1million to at least 15 entrepreneurs and businesses over the three year grant period. Through these loans, SBCP anticipates creating or supporting at least 40 new jobs targeting people with low incomes. Proposed leverage for this project is $150,000.