BioCycle June 2006, Vol. 47, No. 6, p. 27
North Carolina community development banking group creates partnership loan fund to expand recycling related businesses in the region.
Matt Ewadinger

BUILDING on the success of its first Restore, Habitat for Humanity Charlotte recently expanded operations by opening a second location. The new store, with more than 37,000 square feet of retail space, is considerably larger than the original site – providing storage space for construction materials and an affiliate headquarters.
When Habitat Charlotte needed a loan to finance the new ReStore, it turned to Self-Help, North Carolina’s community development banking group. Self-Help’s loans totaled $3.7 million, taking advantage of two different programs to help make the deal happen: the North Carolina Recycling Loan Fund and the federal New Market Tax Credit program.
The Recycling Loan Fund is a partnership loan fund between the N.C. Department of Environment and Natural Resources and Self-Help with the express purpose of lending to recycling related businesses in North Carolina. The New Markets Tax Credit program was designed to provide additional incentives to investors to finance transactions in low-income communities. Self-Help works with New Market Tax Credits nationwide on projects in qualifying areas requiring financing over $500,000. Since 1988, Self-Help has lent $23 million to 108 environmentally-related businesses. These businesses include eco-stores, multi-million dollar recycling processors and environmental technology firms. Borrowers handle collection and processing, paper, scrap metal, construction/demolition debris, plastics and wood. Loans have ranged from $10,000 to over $1 million, with an average loan size of $75,000.
Making loans to these emerging sectors requires special knowledge and relationships, a commitment to sustainability, and an understanding of how environmentally related businesses connect with community economic development. Routinely, firms are turned down by banks because their businesses are too unusual or because they are start-ups. Self-Help, with its expertise in sustainable development and its ability to spend time with each individual borrower, can provide loans that make financial sense for both the company and the lender.
According to Bert Green, Executive Director, Habitat for Humanity Charlotte; “The new facility is a terrific opportunity for us. Self-Help understood the big picture in terms of timing, facility, financing and regulatory considerations, and made sure that the transaction went smoothly.” To learn more about Self-Help’s Sustainable Development lending, contact Brian Schneiderman at brians@self-help.org or visit http://www.self-help.org/sdi.
Matt Ewadinger is manager of the Recycling Business Assistance Center based in Charlotte, which is a cooperative effort of the North Carolina Department of Environment and Natural Resources, and the NC Department of Commerce.