Lender looks to help local businesses

-A A +A
By Ben Bomberger, Reporter

INDEPENDENCE — Grayson County took the first step towards helping prospective small-business owners receive funding to get their businesses running in the Twin Counties.

Brian Phipps of People Inc. of Abingdon approached the Grayson Board of Supervisors about the business providing a micro-lending program for emerging businesses in the Twin Counties.

Phipps said People Inc. was looking to form a partnership between Grayson and Carroll counties and Galax.

The start the process, the three localities would file a joint application through the Department of Housing and Community Development for a $200,000 grant.

People Inc. would receive the grant money and add $100,000 to the pool to make small-business loans available to people interested in opening a business.

Phipps said decisions about loan approval would come from a management team comprised of representatives from each locality.

Phipps suggested using members from the Blue Ridge Crossroads Economic Development Authority because they already have representatives from each locality.

The business loans would be available for $35,000 and less with an interest rate at or slightly above prime.

Phipps said the company is a private non-profit organization similar to Rooftop of Virginia, but whose programs have a different slant.

Plans include going hand in hand with Crossroads Institute in Galax and working closely with Dallas Garrett, director for the regional Small Business Development Center, and Economic Development Director Neal Satterwhite.

Phipps said People Inc. will work one on one with prospective business owners to work on a business plan. Because Garrett already does it locally, they would not impose.

Supervisors’ Chairman Mike Maynard asked if the grant through would help leverage the county to receive more funds.

Phipps said that of the $200,000, roughly half would go towards implementing the program in the Twin Counties, while the remaining — along with $100,000 People Inc. will put in — will be used to fund loans.

“We hope to bring additional funding resources in as needed in the future,” said Phipps.

Maynard noted that a member of the development authority was in the banking business and said the program would not compete with local banks, because most banks do not deal with loans of $10,000 to $15,000 as this program would.

“This program will help people get started who are struggling to get capital,” said Maynard.

Phipps added that People Inc. will work with local banks to help provide larger loans if needed.

For example, if someone needed a $100,000 loan, banks usually require having a large percentage, such as 20 percent, in hand already.

Phipps said People Inc. could provide that extra 20 percent to help a person receive needed funding.

The supervisors gave Phipps the go-ahead to begin the application process and hold a public hearing regarding the loan application at its August meeting.

Allowing Phipps to move forward on the application in no way mandates the board must sign the application, it simply gives more information to the board and allows time to think it over and hear comments from the citizens.

In other business the supervisors:

• set an Aug. 12 public hearing to receive comments on both the new flood plain ordinance and a cross connection ordinance.

• approved a special use permit for Grayson County School System to build the new Grayson Highlands School on Virginia 16 in the Volney community.

• received information about a Day Reporting Program. The program helps offset the number of people sent to New River Valley Regional Jail. Grayson has started looking for ways to cut back on the growing cost of housing inmates at the jail.