Establishing a Center for Micro-Business Development I. TOPIC The Grafton Project: Center for Rural Enterprise II. LOCATION West Virginia III. SUBJECT Establishing a Center for Micro-Business Development IV. SUMMARY Low-income residents of Taylor County, West Virginia, needed financial and technical assistance in the development of new, sustainable businesses. As part of a comprehensive plan to revitalize the county, the West Virginia Community Action Directors Association established a revolving loan fund and the Center for Rural Enterprise. The Center encourages entrepreneurism, managerial effectiveness, citizen participation, and managed development throughout the state. The Center administers a revolving loan fund for micro-businesses loans and provides technical assistance to small businesses using staff experts and outside consultants. The Center will renovate and revitalize two important buildings in Grafton, West Virginia. V. SUCCESSFUL PRACTICE Created a community resource center where businesses and individuals could attend seminars, gain expert advice, receive funding, and form partnerships with others in the community. VI. CONTACTS David Treharne, Executive Director West Virginia Community Action Directors Association Judy Junction, PO Box 4007 Parkersburg, West Virginia 26104 304-295-8807 304-295-3249 (FAX) Kenneth Dean, Executive Director North Central West Virginia Community Action Agency (A Community Action Agency) 213 Jackson Street Fairmont, West Virginia 26554 304-363-2170 304-366-8846 (FAX) VII. CASE STUDY The Problem: Residents of West Virginia need financial and technical assistance to build the community's social and economic fabric. The Approach Adopted: The North Central West Virginia Community Action Agency and the West Virginia Community Action Directors Association began a two part project: (1) The purchase and sensitive renovation of the Willard Hotel and the Depot Train station in Grafton, West Virginia, and (2) establishment and operation of the Center for Rural Enterprise and a micro-business loan fund. How They Implemented The Approach: In April 1995, North Central West Virginia Community Action Agency received a one million dollar appropriation from the U.S. Department of Commerce to establish the Center for Rural Enterprise. The budget included $250,000 for a revolving loan fund, $250,000 for the Center, and $500,000 for acquisition and renovation of two historic structures in Grafton, West Virginia. The revolving loan fund accepts applications from the community for the start-up of new businesses. Loan sizes range from $500 to $10,000. The loans are made to for-profit businesses that employ fewer than 10 people. Applicants need to clearly demonstrate that they will create jobs or retain existing ones. The loans can be used for equipment, machinery, working capital, leasehold improvements, or inventory. The loans are intended for people who do not qualify for bank financing but have the background and ability to run a successful business. Several applications are pending and the first loans are expected to be made in April 1996. The Center for Rural Enterprise is a demonstration of community visioning, planning, and action. Some people have described the work of the Center as community development, others as economic development. The primary objective of the Center is to focus available resources on the development of the community in the broadest sense. The Center's program and curriculum encourage entrepreneurism, effective management, citizen participation, and managed development in all communities. The Center has a goal for the Community to own, control, and utilize its own resources. The Center has many roles in the community. It operates as a training site for community and business development activities, the organizational center for the micro-business loan fund, a community loan office, and a small business technical center. The Center staff and outside consultants help small businesses in issues such as, environmental regulations, business planning, tax planning, and compliance with regulatory agencies. In Grafton, seat of government for Taylor County, the Center has become, in many respects, staff and consultant for the city and county. Linkages to the business and banking communities, colleges, Small Business Development Centers, the general community, and government have all been created by the Center's staff. The Center also functions parallel to the Economic Development Authority and in support of its work. The Center also coordinates its efforts in small business development with other employment and development initiatives from colleges and state and county governments. Community building activities include the development of a "Time Dollars" volunteer service, youth recreation, and oral history programs. The staff is also very active with both city and county planning and organization. "Time Dollars" is an exchange of services between citizens in the community. One hour of any work is valued as equal to the value of any other type of work. Records are kept by the Center so that people can barter their time and skills for the work of other people and their skills. The overall goal of the Center is to encourage the development of enterprises that will be supported by rural communities. Each business should support the growth of other enterprises and spur new activities in the hope that some economic stability and synergy will be achieved. Results: The Center has assisted city and county governments in community based planning that has resulted in the production of the first strategic plans. A series of business workshops has begun that has helped existing business. The Center has been very successful at addressing the problem of deteriorating housing in the state. The Center has received loan applications and will make its first loan in April 1996. The Time Dollars program has been established and will be expanded to include businesses and their goods and services. VII. KEY WORDS Barter Community Action Agency Community Development Entrepreneurism Historic Preservation Low-Income Micro-Business Planning Revitalize Revolving Loan Fund Rural Enterprise Technical Assistance Time Dollars U.S. Department of Commerce ref: grafton.doc