Initiative Capital is broadening its market and product offerings to meet the changing credit needs of North Carolina’s community economic development organizations and growing businesses in the state.
Business lending and small construction loans for affordable housing and owner-occupied business facilities are two areas of expansion, says Kevin Harris, president of Initiative Capital. The certified community development financial institution is the lending subsidiary of the N.C. Community Development Initiative.
“We’re getting involved in these new areas because we feel they, ultimately, are the areas that will stimulate the economy,” Harris said. “Small businesses create most new jobs. We want to do what we can to make capital available for them to do that.”
Initiative Capital, formed in 1999, traditionally made loans primarily to the nonprofit community groups that received grants from the Initiative for community development. It is now expanding its lending to other nonprofits as well as businesses in North Carolina.
“We are broadening our offerings to invest in both nonprofit and for-profit organizations that are engaged in the economic growth and development of their communities,” Harris said. “We’re expanding our product line to meet the wider range of capital needs for those organizations that are making an impact in low-resource communities.”
Adapting neighborhood stabilization for broader impact
Initiative Capital is expanding its neighborhood stabilization lending beyond the loans it is now making through the federal Neighborhood Stabilization Program (NSP).
Many banks are donating foreclosed properties to community development organizations to get them off of their books, Harris said. This offers nonprofits a prime opportunity to purchase and renovate foreclosed houses as rental property that can generate income for their development work.
“We recognize there is a real need and opportunity to do more neighborhood stabilization lending with more organizations,” Harris said. “It’s such a win when you can turn a blighted property around. And with these new property donations, local nonprofits can not only increase the supply of affordable housing and revitalize their communities, they can enhance their own sustainability to ensure their continued ability to pursue community development work.”
New products fill capital gaps
Initiative Capital has begun making loans to existing small businesses that operate in or serve low- and moderate-income communities and need capital to grow and create jobs. It is also making construction loans to respond to the pent-up demand since the recession limited the supply of capital for such projects.
Initiative Capital will continue offering permanent financing for multi-family residential and owner-occupied commercial buildings and bridge financing for multi-family and residential development with firm takeout.
The N.C. Community Development Initiative leads North Carolina’s collaborative community economic development effort, driving innovation, investment and action to create prosperous, sustainable communities. For more information, visit www.ncinitiative.org.