Richmond Economic Development Corporation (REDC) announced the kick off of a $4 million fundraising campaign to re-capitalize its Business Enterprise Zone Loan (BEZL) program. REDC has raised $2,085,000 in loans and/or commitments from the Opportunity Finance Network ($700,000), Capital One, Inc. ($500,000), Bank of America ($300,000), and a $585,000 grant award from the U.S. Department of the Treasury's Community Development Financial Institutions (CDFI) Fund. REDC is seeking to raise the remaining funds from a combination of grants and loans, including tax credits that it will be eligible for, if its application for New Markets Tax Credits (NMTC) is approved.

REDC will use proceeds from the campaign to support its existing loan products offered to small and minority-owned businesses unable to qualify for traditional bank financing in qualifying low-income communities, enterprise zones, and hot zones of the Richmond/Petersburg metropolitan statistical area (MSA). REDC's BEZL program provides financing up to $250,000 to eligible small businesses for the purchase or rehab of "owner-occupied" commercial or mixed-use properties, acquiring machinery and equipment, and for expansion working capital purposes. The program is designed to offer a fixed and affordable interest rate, with a loan to value of up to 90%, in order to stimulate job creation/retention and increase the flow of credit and capital into targeted low-income communities. For larger projects requiring financing greater than $250,000, REDC will use its 504 development loan program. REDC was granted a license under the U.S. Small Business Administration's (SBA) 504 development loan program in July 2006, which allows it to provide financing ranging from $2 million to $4 million statewide. To the extent permissible, REDC will use BEZL loans in combination with the 504 development loan product on projects requiring $500,000 or less in financing. On larger projects, REDC will partner with local financial institutions up to allowable loan limits.

REDC's BEZL program was rolled out in 2004 and initially targeted small businesses in the City of Richmond only. There is currently $2.3 million in loans outstanding under the program, as REDC expands the offering of this product throughout the MSA. "We are particularly pleased with our increased and expanded lending capacity, and the potential impact it will have on fostering the formation and expansion of small businesses in the Greater Richmond area", said Stephen J. Schley, REDC's President and CEO.

REDC is a Community Development Financial Institution (CDFI) and a licensed financial intermediary of the SBA, with assets under management exceeding $8 million. The organization in addition to its loan programs, also provide loan administration services to local governments having active community development loan programs.

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