Information for Bank Partners

Appalachian Growth Capital (AGC) is a Community Development Financial Institution (CDFI), a special type of lending institution designed to support small businesses.* AGC will work with banks and revolving loan funds as an additional or alternate funding source for small business projects in Ohio’s Appalachian-designated counties.

Certified by the U.S. Treasury, CDFIs help make credit available in underserved markets. They work with banks and other lenders by expanding credit access to businesses whose needs cannot be wholly financed through commercial lending.

*As required by U.S. Treasury Regulations, AGC will start as a loan fund and then apply for CDFI status.

Our Services
AGC will partner with banks, local loan funds and small business service providers to meet the credit needs of the region’s small to mid-sized businesses. Initially it will focus on loans that lower the down-payment needed for companies to purchase fixed assets like equipment or facilities. AGC will also make loans to creditworthy companies that cannot qualify for bank loans due to regulatory barriers. Over time, AGC plans to develop loan products to help small companies meet their working capital needs.

Funding for AGC
Recognizing the need in this underserved area, the Appalachian Regional Commission granted seed capital to help start the growth fund. Additional funds may include the CDFI fund at the U.S. Treasury or
other federal agencies whose grants provide capital to CDFIs. Some federal programs allow underutilized local loan funds that they capitalized to be transferred to CDFIs.

Commercial banks receive Community Reinvestment Act (CRA) credit from the U.S. Treasury for supporting CDFIs. Foundations and corporations also support CDFIs helping to improve the economies of struggling communities and regions.

AGC will operate in close collaboration with revolving loan funds at OMEGA and OVRDC, local development districts serving Appalachian Ohio.

Benefits from AGC
Supporting business growth creates jobs, strengthens communities and expands the region’s economy.

• Businesses grow faster when a CDFI helps them  obtain the credit they need or steers them  to services that help them overcome their  business challenges.
• Banks benefit because a CDFI helps them  satisfy and retain customers and also helps  them meet their federal Community Reinvestment  Act requirements.
• Local loan funds benefit because a CDFI helps  identify more projects to use their funds. A CDFI  may also help reduce the administrative costs  for their loan programs.
• Other regional CDFIs and those who make sector- specific loans can partner in loan funding.
• Communities benefit when CDFIs help drive more  growth, jobs and tax revenues.

AGC Loans and Terms

• Initially the largest loan will be $100,000.  This amount  will increase over time as its loan fund grows.
• Credit needs up to $1,000,000 can be met through  partnerships with banks, local loan funds and  other CDFIs.
• As a CDFI, AGC’s terms are VERY flexible and  depend on the transaction being financed.
• Interest rates and fees are subject to current  market conditions and are usually slightly higher than  participating banks so that CDFI loan funds do not replace bank financing.
• AGC can offer a longer amortization than  most bank loans, lowering loan payments  and improving company cash flow.