How many times have you heard someone say access to capital is critical for small business? Plain and simple, access to capital for startup and existing small businesses is critical, hugely important to overall economic recovery and growth of the United States.

Why is access to capital so important? The answer is fairly simple. In the same way a car needs fuel to run, small businesses need capital to operate. Capital allows small businesses to expand and hire additional employees. Small and micro-size businesses create an overwhelming majority of jobs in the US, so providing entrepreneurs with access to capital is essential to a healthy and vibrant economy.

Why is access to small business capital tight right now? There isn’t a short answer here. It’s tied to the economic downturn and the record number of bank failures. Because of a climate of uncertainty, banks have either steered away from small business lending or have severely tightened their credit standards. It’s no secret small business lending is very risky in normal times. Complications due to current economic conditions and other issues make this much more difficult for everyone involved.

Where can small businesses go to obtain capital? Programs like the Center’s Rural Enterprise Assistance Project (REAP) can help. REAP provides Nebraska’s rural small businesses access to capital in good and poor economic times. Our staff knows about traditional and non-traditional lending sources. Often it takes more than one source to make a deal happen, and programs like REAP can make the difference by serving as the loan packager. REAP has loaned in record numbers over the past three years and has kept access to capital a reality in places where it wouldn’t have been available otherwise.

Federal programs are important too. Examples include USDA’s Rural Microentrepreneur Assistance Program (RMAP), which makes loan dollars and technical assistance available to organizations across the country. SBA’s microloan program also plays a pivotal role in supporting the nation’s small and micro businesses.

Find out more about REAP services at http://www.cfra.org/reap or contact Jeff Reynolds, REAP Program Director, at 402.656.3091 or jeffr@cfra.org.