A $30,000 Orange County small-business loan helped Rachel Radford buy insurance, set up a website and open Ceremony Salon two years ago at 300 East Main in Carrboro.
It was just her and two other stylists at first, she said, but the 1,000-square-foot salon grew quickly. When Womancraft left its larger space, she expanded and added more locally produced products. A $10,000 county grant helped with the move but also is providing her staff with educational opportunities and allowing her to soundproof a room where they provide facials.
It was intimidating to apply for the loan, Radford said, but the county’s Economic Development Office and its loan committee have been there every step of the way, sending information and alerting her to seminars. She’s enjoying the business side of the salon more than she expected, Radford said.
She now has 400 regular clients – her husband helps manage the books and their young boys – and employs 14 people who earn a living wage from their commissions. Ceremony Salon will celebrate its second anniversary Friday.
“I would like it to become a place where other hairdressers in the area can come for education,” Radford said. “I’m really into making hairdressing professional; people thinking of it as a valid profession. It’s not just flaky people that play around with hair all day.”
Small businesses are the lifeblood of an economy, experts say. The Small Business Adminstration reports that small businesses and startups created 63 percent of the net new jobs between 1993 to mid-2014 and more than 7 million of the 11 million jobs created during the recent economic recovery.
“If you want to have locally owned businesses and you want to promote the ‘shop local’ theory, then you certainly have to be willing to support local businesses, your small businesses,” said Yvonne Scarlett, Orange County’s business retention economic developer.
The county incorporated its revolving loan fund in 1999 as the Orange County Small Business Loan Program Co. Since 2009, it has approved 20 loans, she said. Only a few applicants were denied.
The maximum loan amount was raised this year to $100,000; most loans are $50,000 to $75,000, with a five-year repayment timeline, Scarlett said.
The loans – and a business grant program that started last year – are funded with Article 46 quarter-cent sales tax revenues. The sales tax, approved in 2011, provides roughly $1.25 million annually for economic projects, included the development and expansion of local businesses and jobs.
Loans are targeted at clients with limited access to traditional financing or government programs. While applicants don’t have to live in Orange County, their business has to be here, and they’re required to invest at least 15 percent of their own money.
Applying for a loan is not always easy, Scarlett said. It requires a business plan, the four-page application, and personal and business tax returns, credit reports and financial statements.
The loan program president reviews the completed package before handing it to the loan committee – small business owners, bankers and county staff. They interview applicants one-on-one, sometimes offering guidance or directing them to mentors at SCORE Chapel Hill and the state’s Small Business and Technology Development Center.
Mark Holt, owner of Masterpeace Barbershop in Hillsborough, had been in business for several years when he decided to transform his grandparents’ former home into a neighborhood shop. He sought advice from a mentor at UNC and wrote a business plan.
The board helped narrow down his ideas – there were a lot, he said, from the barbershop to a tattoo parlor. He used a $10,000 grant and a $15,000 loan last year to upgrade the shop, add parking and new barber chairs, and invest in marketing, signs and business cards.
Word of mouth is growing about his appointment-only business, he said, and once Masterpeace is firmly established, he plans to open a second location in a more heavily traveled shopping center. He’s grateful for the help, passionate about what he’s doing and determined to pay back the loan, he said.
“It wasn’t just the money,” Holt said. “It was the learning experience and the advice that they were giving me. I got so much love from (economic development director) Steve Brantley, Yvonne Scarlett and all the guys on the committee – ladies and gentlemen.”
Relationships are important, Scarlett said, along with ensuring business owners don’t get in over their heads.
While some have been slow with payments and others had their loans restructured, she said, no one has defaulted. Six businesses have paid off their loans and two are just a few payments away, she said. A couple closed their business but repaid their loans.
“These business owners put everything they have into these businesses, and we should be grateful that they are part of Orange County,” Scarlett said. “The same for all the loan recipients. They work extremely hard, and we should be grateful and respectful that they have remained in Orange County.”
The idea for Seal the Seasons started at UNC, and the flash-freezing operation launched last year at the Piedmont Food and Agricultural Processing Center in Hillsborough. The company will stock North Carolina-grown fruits and vegetables on the frozen-food aisle in 325 grocery stores this year, including Harris Teeter, Lowes Foods and Whole Foods, co-founder Peter Mateer said.
While banks were skeptical of their rapid growth, he said, Orange County gave them a $50,000 loan in September. The operation, which started with 10 employees last year, will expand to 45 seasonal workers this year and five full-time managers.
Mateer, 23, said the loan got them through last year’s broccoli season and served as bridge funding this year.
Seal the Seasons pays farmers a portion of the cost up front and makes payments on the rest, he said. They’re looking for more small- and large-scale farmers, each of whom is featured with a photo and a quote on every bag of produce they harvest.
“Just over the course of the last year, the team has been talking to farmers. We’ve been going out and visiting ... seeing the whole farm, driving around for two hours, and when the team came back here, we always talked about Gary told us this story, or Mark had this to say today. Sometimes, it’s just ridiculous, off-the-cuff things that you never expect,” he said. “We really want to share those with people.”