The Nevada Microenterprise Initiative in partnership with its parent nonprofit lender the Valley Economic Development Center Inc. have added $2 million to support their small-business loan program statewide.
Both NMI and VEDC will use the investment to target economic and community development in low to moderate-income communities. VEDC issues small-business loans ranging from $50,000 to $250,000.
“VEDC has been the lender of last resort for many good companies that have struggled during the economic downturn,” said Roberto Barragan, president and CEO of VEDC. “We are very happy to have this opportunity to bring our services and unique approach to small-business finance to Nevada entrepreneurs.”
Nevada is home to more than 221,000 small businesses with 97.5 percent having fewer than 100 employees. But the current unemployment rate of 9.6 percent is causing more individuals to start businesses.
“A strong network of support is critical in ensuring a healthy, vibrant small-business community,” said Bruce Breslow, director of the Nevada Business and Industry Department. “We are pleased that NMI, in partnership with VEDC, is helping to fill the gap for businesses seeking access to capital in Nevada.”
VEDC is a nonprofit small-business lender in Van Nuys, Calif. The center this year took over the struggling NMI, which also runs the Small Business Administration-affiliated Nevada Women’s Business Center and a statewide microlending program that makes loans of less than $50,000.
The VEDC’s acquisition of NMI involved no cash; instead the VEDC assumed the initiative’s assets, creating a subsidiary based in Henderson.
VEDC, Southern California’s largest nonprofit development company, has a portfolio of about 500 active loans worth $30 million. In a recent interview with the Las Vegas Business Press, Barragan said VEDC issues about $2 million in loans every month.
As a licensed community development financial institution, VEDC can borrow money at low bank rates to lend at higher interest rates.
Much of its funding is derived from bank grants.
Banks, which worry about lending to higher-risk small businesses, tend to refer those clients to VEDC.
Those grants and referrals help banks fulfill their requirements under the Community Reinvestment Act, a federal law passed in 1977 aimed at encouraging banks to meet the needs of all borrowers in their communities, including low- and moderate-income neighborhoods.
Contact reporter Chris Sieroty at firstname.lastname@example.org or 702-477-3893. Follow @sierotyfeatures on Twitter.