Increasing Small Business Lending in Underserved Areas

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Access to affordable financing is a growing challenge for small businesses, particularly in low-income, rural, and underserved areas of the state. It is also true, however, that banks, credit unions, and intermediaries in these areas have capital to lend. How can we connect businesses in need of financing with the financial institutions that are ready to make loans? The Support Center and other partners explored this topic at a recent summit on small business lending and services in Ahoskie, NC.* This post describes some of the key ideas that came out of the summit.

The day-long summit was organized around a series of panels. Panelists included:

  • Technical assistance providers who discussed the training they provide entrepreneurs to prime them for accessing financing and grow their business
  • Community-based organizations, who explained how they partner with lenders within their communities
  • Small business lenders, who described their lending programs and their desire to expand the reach of those programs.

Two major themes emerged for improving access to capital for small business: coordination and outreach.


A major challenge raised by panelists is effectively coordinating the efforts of business service providers and lenders to ensure that small businesses can access both the assistance and capital they need to be successful. One way of doing this is to create a more robust referral system in which the various institutions more regularly and effectively direct small businesses to the appropriate assistance provider or lender. This is critical to ensuring that these businesses do not get lost or discouraged in the shuffle between lenders and assistance providers. Success will lie in lenders and assistance providers maintaining comprehensive knowledge of the resources that each offers, and in taking the time to facilitate personal connections between borrowers and various providers.


Coordination between lenders and business service providers is only part of the solution. It is also necessary to conduct effective outreach to small businesses that are in need of financing but are unaware of or unable to access available resources. The need is particularly acute in underserved rural and low-income areas. Summit participants advised service providers and lenders to go into these areas to conduct joint workshops and trainings in order to reach and educate entrepreneurs. Additionally, participants recommended using existing networks, such as the chambers of commerce and economic development commissions, to reach entrepreneurs where they are. Finding new community partners, such as churches and libraries, may also offer a means to connect rural entrepreneurs to available resources and financing.

The information sharing and face-to-face interaction during the summit was invaluable. It sparked a much-needed dialogue and generated enthusiasm for forming a more strategic partnership among participants. Most importantly, the participants agreed that more summits should be convened to deepen our collaboration and benefit other parts of the state. As a result, The Support Center is currently in the early planning stage for a second summit in Halifax County.

Sadaf Knight is the Policy and Research Director of The Support Center

*The Ahoskie summit was convened in December 2011 by The Support Center, the Federal Reserve Bank of Richmond, the North Carolina Rural Economic Development Center (Rural Center), and the North Carolina Indian Economic Development Initiative. The forum was hosted by the Roanoke Chowan Community College Small Business Center. There were more than 50 participants representing local chambers of commerce, Small Business Centers, community development credit unions, banks, community organizations, municipal economic development agencies, technical assistance providers, and representatives of Congressional leaders.

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