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Rural Lending Program Encourages Small Business Success


Posted on: Tuesday - May 13, 2014

Ocoee-based Appalachian Bee has expanded beyond its humble beginnings in the owner’s basement into a 2,000 square foot manufacturing facility complete with a soap studio, packaging and shipping area, and storage for supplies and honey barrels. Entrepreneurs Phil and Dianna Pipkin realized their long held dream to open a barbeque restaurant in Kingsport and now sell their barbeque sauce throughout the U.S. T&L Baking Company’s facility in Cleveland has nine ovens and the capacity to produce 10,000 cakes per week, while U.S. veteran and West Tennessee native Ted Dunn launched his multi-purpose trailer hitch invention after a 30-year career with GM.

Appalachian Bee creates artisan honey and natural skincare products.

At first glance these businesses may seem completely unrelated; however, they do have three things in common. They are all small businesses. They are located in a rural area of the state. And they have received a Rural Small Business and Entrepreneurship Loan Fund from TNECD’s Business Enterprise Resource Office.

While financing through traditional lenders can often be difficult to secure, this microloan fund provides loans in amounts of $500 - $20,000 for working capital, equipment and machinery, remodeling, marketing and more.

“With the help of TNECD and the input of our local Tennessee Small Business Development Center, our company continued to grow in the past five years,” said Laurie Pavlou, co-owner of T&L Baking Company. “We expect to hire at least two more full-time employees and increase sales by at least 10 to 12 percent this year with the help of a new BERO microloan.”

Phil and Dianna Pipkin opened Phil’s Dream Pit restaurant in Kingsport.

Existing businesses and startups including part-time and home-based businesses that are located in a rural area of Tennessee with fewer than 10 employees are eligible. The borrower must be current on all personal and business bills with no excessive credit card debt and no open bankruptcies or liens. Collateral is required for all loans over $5,000 with collateral requirements on a case-by-case basis for loans of $5,000 or less.

The favorable loan terms include an interest rate of 2 percentage points below prime with a base of 1 percent fixed, up to a five year repayment term, no prepayment penalty and a 2 percent closing fee.

"Having the BERO funding gave me the ability to reach the next level with my products by promoting them in a professional manner and gave me exposure on the Internet with my website that, otherwise, I would not have been able to do,” Appalachian Bee owner Diane Ravens explained. “It was an easy process applying for the funding, and the interest rates were unmatched. Having this support from the state of Tennessee positively affected our bottom line, and each year we continue to grow.”

T&L Baking Company specializes in pound cakes and angel food cakes.

In addition to the loan application, prospective borrowers are evaluated on the strength of their business and financial plan, experience of the business owners and the applicants’ personal credit history and available collateral.

“Taking that leap of faith is difficult enough,” Ravens added, speaking about starting her business. “When you get that support it was like the state of Tennessee saying ‘We believe in you’ and ‘We support what you are doing!’”

See the Rural Small Business and Entrepreneurship Loan Fund web page for more information, and visit the links below to read more about our borrower success stories.

T&L Baking Company, Cleveland, TN
Phil’s Dream Pit, Kingsport, TN
Appalachian Bee, Ocoee, TN
T&C Corporation, Lexington, TN