Our Policy & Research program provides timely research and analysis on the broader economic impact that our small business lending programs and community development work to put forth thoughtful policy recommendations to strengthen our state’s economy. Through collaborative efforts with universities, research partners, and advocates, Carolina Small Business Development Fund publishes research reports and studies that illustrate the impact of community-based financial service providers in under-represented communities, and to present cross-cutting solutions for North Carolina’s most pressing economic challenges. For information about our recent publications, see below.
One of the primary ways that Carolina Small Business Development Fund (CSBDF) extends its reach into communities is through partnerships. By working with other organizations and institutions, CSBDF enhances its programs, leverages expertise and local ties, and achieves a greater impact in our communities together. In the past few years, we have worked to create new partnerships with North Carolina’s Historically Black Colleges and Universities (HBCUs), recognizing the important role they play among students and in their local communities. In fact, there is a great opportunity for HBCUs and community development financial institutions (CDFIs) like CSBDF to develop partnerships and work together to spur investment in underserved communities.
To help move this dialogue forward, we released a report that details the inception, development, and progress our HBCU initiative. It started in 2014 as an internship program with the aim of exposing local HBCU students to the opportunity finance industry. Over the past three years, this initiative has grown and evolved to encompass partnerships with HBCUs to expand access to entrepreneurial training, resources, and capital.
Despite their impact on job creation and the economy, Main Street small businesses still face significant challenges accessing capital and resources to help them start up and grow. This report provides a look at the state of small businesses in North Carolina and the challenges and opportunities they face. It gives an overview of the types of financing that are currently available to small businesses, from banks to community development financial institutions, and credit unions to online lenders.
This report also examines the types of assistance currently offered by the State of North of North Carolina, and provides recommendations for how the state can make proactive investments to support the growth and development of Main Street small businesses.
With 87 percent of businesses in North Carolina having fewer than 20 employees, small businesses are critical for North Carolina’s economic vitality. Small businesses create more jobs during economic downturns, as compared to large businesses, making them important for local economic resiliency. Research shows that this is especially true for local, “homegrown” small businesses.
In this report, Carolina Small Business analyzed the economic impact of the 228 loans, totaling $19.5 million, which it made to small businesses between 2011 and 2015. These businesses were in a range of industries and created or retained 742 jobs throughout the state. Using input-output analysis, which measures the ripple effects of these loans in the broader economy, the study showed that Carolina Small Business’ investment generated economic activity that would not have otherwise occurred in North Carolina.
States that offer programs that have an explicit aim at supporting small businesses have a significant impact on their local economy. In this report, Carolina Small Business looks at how two states—South Carolina and Virginia—are making huge contributions to their state’s economy through such partnerships. Together these programs have leveraged state support to raise millions of dollars to invest in hundreds of small businesses, create thousands of jobs, and build assets that are reinvested in the communities they serve. This report also provides policy recommendations on how North Carolina could establish similar successful partnerships with Community Development Financial Institutions and other mission-based lenders.
Venture capital (VC) is an important tool for spurring innovation among companies that in turn generate economic growth, create jobs, and drive our economy. VC firms help to provide entrepreneurs the capital they need to develop concepts, start companies, grow companies, manufacture products, and eventually become publicly traded. While obtaining VC funding can be a catalyst for an emerging firm, the market for VC funds is highly competitive, with less than one percent of firms receiving VC funding. This brief provides an overview of the VC industry in North Carolina.
Nearly 70 small business across the state were able to generate millions in revenue and retain or hire 363 workers according to findings in this report. Carolina Small Business reviewed the loans it made between fiscal years 2012 and 2013 to determine the economic multiplier of its investment. During that period, Carolina Small Business provided loans to 69 small companies in 34 counties across the state, totaling $6.2 million. Using an input-output analysis, which measures the ripple effects of their loans in the local economy, the study determined that our borrowers have generated important economic activity that would otherwise not have happened without Carolina Small Business’ investment.
Community Development Financial Institutions, or CDFIs, are community-based financial service providers that are working to create economic opportunities in the most distressed and underserved communities in the nation. There are 16 CDFIs currently operating in North Carolina. This report illustrates the impact of CDFIs in our state economy and in creating jobs and expanding access to capital across the state.
As large banks have been pulling back from small business lending, community-based lenders have been stepping in to try to fill the lending gap. In this report, “Small Business Lending in North Carolina: The Increasing Role of Community Lenders,” Carolina Small Business examined small business lending patterns in the state by banks, Community Development Credit Unions, Community Development Financial Institutions, and credit unions. It illustrates that while larger banks focus their lending on upper-income areas of the state, CDFIs, CDCUs, and credit unions focus more on providing small business loans to entrepreneurs in lower-income areas.