SBA Community Advantage pilot program changes announced, increasing access to capital for underserved entrepreneurs
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Good news for Northeast Minnesota small businesses
In late March, Vice President Kamala Harris and SBA Administrator Isabella Casillas Guzman made an exciting announcement regarding changes to the agency’s Community Advantage pilot loan program, a key SBA tool for Community Development Financial Institutions (CDFIs) like the Northland Foundation. The adjustments prioritize equitable access to capital for low-income borrowers and those from underserved communities.
The Community Advantage pilot program was launched in 2011 and originally set to expire this September. The program was intended to allow mission-oriented lenders, primarily nonprofit financial intermediaries focused on economic development to participate in the 7(a) loan guarantees and help increase access to credit for small businesses located in underserved areas.
Among the key changes announced, the SBA will:
- Extend the pilot program to September 30, 2024 (was set to expire September 2022).
- Increase the maximum loan size from $250,000 up to $350,000.
- Simplify underwriting and collateral requirements, including increasing the maximum unsecured loan size from $25,000 to $50,000, removing barriers that disproportionately impact underserved borrowers.
- Introduce additional abilities for lenders to make revolvers and lines of credit, interest-only periods, and other modifications that meet borrowers where they are.
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Itasca County client story: Grand Rapids Tire and Auto |
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Grand Rapids Tire and Auto is a staple of the Grand Rapids community. It opened in 1984 as a small, one-stall shop selling and servicing tires. In 2005, a new building accommodated expansion to five stalls. The business provides automotive repair featuring a team of technicians and state-of-the-art equipment and sells top-brand tires for everything from passenger cars to commercial trucks, buses, agricultural equipment, ATVs, and trailers, along with a full line of Interstate batteries.
When the longtime owners decided to retire and sell in 2021, it turned out to be perfect timing for another Grand Rapids couple, Darrin and Shar Anderson, to follow their dreams.
"We had talked about wanting our own business for years. We researched the business and talked to community members. We heard nothing but great things, not only about the business but also about Bruce and Linda Anderson, the original owners," said Shar.
The lion's share of the Anderson's financing was provided by Members Cooperative Credit Union (MCCU), who approached the Northland Foundation to help round out the loan package. The Andersons spotted the 'For Sale' sign in September and financing closed within six months. Shar and Darrin officially took over operations in February 2022.
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"It's great to see smooth ownership transitions like this keeping businesses local. With equity from the Andersons and gap financing from the Northland Foundation, the deal came together quickly and seamlessly." — Al Bastien, MCCU Business Services Officer |
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Darrin graduated from the Universal Technical Institute in Phoenix, Arizona and later received Advanced Mercedes Benz Training. He has been working as an auto technician in the Grand Rapids area for 16 years. Shar's background is in Business and Human Resources, to which she added an MBA in 2020.
"It just fit. Darrin works as a technician and oversees the shop while I am able to put my education and experience to work running the front office," explained Shar.
They view customer service and quality work as their top priorities.
"We have a great crew of five and over 30 years of combined automotive experience. We will strive for excellent customer service by providing honesty and transparency in every aspect of servicing your vehicle needs," stated Darrin. "We are very optimistic about the future."
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Shareable: Minnesota Agricultural Producer Survey |
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The Minnesota Department of Agriculture, the University of Minnesota, and 40+ statewide partners are implementing a three-year, USDA grant-funded project to learn more about small, mid-sized, and emerging farmers in Minnesota, including tribal producers who sell at least $500 in agricultural products annually to local markets. Here is a one-page description of the project.
A May survey will gather input from producers. Names and contact information will remain private. Aggregate data will:
- Supplement the USDA Agricultural Census with data about farmers and markets not fully represented in the Ag Census,
- Support the development of data-informed programs and services for small and mid-sized farms, including emerging farmers, and
- Strengthen recommendations to the state legislature that support historically underrepresented and under-supported farmers.
The survey is open through May: https://z.umn.edu/NorthlandFDN. Farmers are encouraged to provide detailed responses, including a valid farm name and how they heard about the survey. This helps minimize bot responses. Compensation is available. Only one response per farm is allowed. For more information contact lebo.moore@state.mn.us.
If you work with agricultural producers, please share this opportunity with them.
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Northland Foundation staff members are continuing to work remotely at this time. Email is the best way to reach us.
Business Services Director
202 West Superior St., Suite 610, Duluth, MN 55802
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We work with the people, businesses, and communities of Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, and St. Louis Counties and the Native Nations within our geographic service area: Bois Forte Band of Chippewa, Fond du Lac Band of Lake Superior Chippewa, Grand Portage Band of Lake Superior Chippewa, Leech Lake Band of Ojibwe, and Mille Lacs Band of Ojibwe.
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