Miranda Wallace has always looked to LiftFund, a nonprofit loan administration, for guidance and financing for her small business, Gluten Freedom Bakery, which she founded in 2014.
After Hurricane Harvey, LiftFund reached out to her and asked if they could be of assistance.
“They asked me, ‘Were you affected at all?’ And I was,” Wallace said. “There was a lot of construction going on at the airport. There were things that needed to be taken care of, so that slowed me down.”
The nonprofit helped Wallace refinance her loan, which she said was ultimately a huge help to her business.
As the result of a new revolving loan fund, LiftFund will now be able to help more Harvey-affected small businesses.
Thursday, the nonprofit announced a $3 million investment by the U.S. Department of Commerce’s Economic Development Administration that the nonprofit matched with its own $750,000 contribution. The fund will go toward a revolving loan fund to aid businesses affected by Hurricane Harvey.
Jorge Ayala, district director of the EDA, said the administration works with microlenders to give all kinds of grants, primarily for infrastructure and economic development projects.
In 2018, the EDA received $129 million to help communities affected by Hurricane Harvey.
Ayala said this fund was exhausted by the end of September, but he pushed to receive extra funding for a revolving loan program. He reached out to LiftFund to administer the loans.
“We don’t do a lot of revolving loan funds. We haven’t done one in the last 10 years,” Ayala said. “The idea with a revolving loan fund is that it goes back into the fund for other loans to be made.”
The loans, capped at $250,000 per business, will be available to small businesses in an 18-county region covering the Golden Crescent and Coastal Bend. Ayala said the loans will be offered at a special 4% interest rate until March 2020.
Estrada said LiftFund loans like the one made available by the EDA grant provide opportunities for those who are unable to obtain other means of financial support. The nonprofit also provides mentorship and business education.
Janie Barerra, president and CEO of LiftFund, said the nonprofit is able to take risks that banks won’t.
According to a LiftFund news release, 67% of its clients have been in business less than five years, and 32 percent are startups with less than a year in business.
Laura Leal Estrada, LiftFund’s marketing manager, said the nonprofit will match applicants who are not eligible for the new revolving loan with other available loan options.
“Maybe some of them will not meet the criteria for the EDA-funded loans, but certainly we have other options available for them,” Estrada said.