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February 10, 2000
VCLF Makes a Big Difference in a Small State

Vermont Community Loan Fund brings a vibrant program of affordable housing, community facilities, and small business to the Green Mountain State.

"I've worked with banks that frankly don't give a hoot whether I live or die," said Rebecca Samanci, who with her husband Yavuz owns Cobb's Corner, an organic specialty food producer in Westford, Vermont. "Vermont Community Loan Fund (VCLF) cares about me personally."

A small business loan from VCLF recently made the difference between bankruptcy and expansion for Cobb's corner, which struggled for two years with soaring debt as they invested in new facilities and equipment. Samanci refers to those years as "the Valley of the Shadow of Death," but now, with working capital from VCLF, her company is back in the light and meeting the growing demand in New England for its outstanding hummus, babaghanoush, burritos, and other products.

The Samancis are just one of the many success stories at VCLF, a state-wide community development financial institution based in Montpelier. Started in 1988, the fund recently topped the $10 million mark for loans to Vermont housing and community projects and businesses. Including leveraged funds from other institutions, VCLF has provided access to over $60 million in capital.

VCLF's Enterprise Fund supports businesses state-wide that use Vermont's abundant resources, including family farms, lumber mills, furniture makers, food cooperatives, organic producers, florists, cheese makers, and small retail establishments. The fund recently helped a small company called Nostalgia Wooden Box, which prints old-fashioned logos on hand-crafted wooden boxes, fill an order for a major retailer.

Through an arrangement with the USDA's Rural Development program, VCLF also makes additional grants to several businesses and organizations for technical assistance. For instance, grants have been made to conduct a feasibility study for starting a Historic Agricultural Education center in Montpelier, and to prepare a framework for developing a farm labor service cooperative that would provide skilled temporary workers to small farms.

The Building Community Fund of VCLF supports affordable housing and community-based nonprofits in Vermont such as family centers, community land trusts around the state, women's shelters, elder and child care centers. VCLF helped construct a recycling/repairing facility in Middlebury, and purchase and renovate a house in Castleton to provide transitional housing for adolescent girls from unstable living situations.

VCLF provides community-minded investors in Vermont, including individuals, banks, insurance companies, hospitals, religious institutions, foundations, and State and Federal agencies, a practical way to help their neighbors and their communities. Investors accept a lower rate of return, choosing up to 4 percent, so that VCLF may lend funds at a below-market rate to make projects affordable for the low-income population that needs them most.

Lenders can invest as little as $1,000 for one year, and can choose their term up to fifteen years, but larger investments for longer terms offer VCLF borrowers the greatest flexibility. To date, VCLF's cumulative losses are $20,336, or 0.2 percent, and although their loans are not guaranteed they have never lost a dollar of their investors' money.

VCLF is a stunning example of how social investors can have a direct impact on human well-being through community investing. It is part of a growing movement recognizing that community-supporting low-interest loans are stable investments that have emergent benefits for everyone in the borrowers' community.

Key to their success, VCLF is able to recognize businesses and organizations with honorable and responsible people behind them, those that just need that extra boost to add value to their community. That includes businesses, like Cobb's Corner, that are able to learn from hard times and move in a positive direction.

"They are interested enough to consider whether we have the talent and skill to carry on this business even if we have setbacks," said Samanci. Anyone who has tasted Cobb's Corner humus would have to agree with VCLF.


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