America’s small businesses create two out of every three new jobs and account for nearly half of America’s overall employment. They play a vital role in helping our economy, adding more than 5.1 million new jobs since August 2003 and helping reduce America’s unemployment rate to 4.7 percent, below the average rate over the last 50 years. Because of their integral role, it is essential to foster their growth and expansion, which will in turn create more job opportunities through economic development.
For small businesses that need extra capital or want to expand, the financing alternatives can be complex and difficult. However, with the assistance of the Business Expansion Funding Corporation (BEFCOR) and its Executive Director Richard Bargoil, funding is much more readily available and the process of obtaining it as streamlined and painless as possible.
Bargoil has a unique perspective on small business owners and understands how intimidating the loan process can be. At the helm of BEFCOR, he uses this insight to pair business owners and lenders, essentially packaging economic growth by facilitating loans through the Small Business Administration’s 504 Loan Program.
Richard Bargoil spent nearly 30 years working as business development manager for the city of Charlotte’s economic development office. He was responsible for managing and underwriting small business loans. Working with innovative leaders and directors who gave him both guidance and flexibility in creating loan programs and tools to foster Charlotte’s growth, under his leadership over 200 businesses were assisted and over 500 new jobs created.
Bargoil has a great understanding and appreciation for small businesses: “Outside of my family, my passion has been to help small businesses access resources that enable them to grow and achieve their dream of business ownership while expanding our economy.”
He has devoted much of his career to finding ways to help fuel their growth.
Coinciding with his retirement from the city, Bargoil found himself restless and ready for a new challenge. He accepted the position with BEFCOR. Bargoil asserts that the term “rewirement” might be more accurate assessment than retirement: “I feel that this organization is very well poised to support business development and business growth. It is an organization that understands the importance and role of the small business owner.”
BEFCOR is already a strong organization, and Bargoil says he has bigger goals than merely acting as its new caretaker.
“BEFCOR’s excellent staff, strong loan portfolio and continued growth in assisting businesses and lenders across North Carolina allows me the opportunity to help position our organization to be a key economic development partner in this region and the state,” Bargoil affirms. “A large part of why I took this job was because I knew the board was very excited and interested in growing the organization and understanding how to become a strong economic development partner. I hope to help position us to continue to bring value to our customers.”
Bargoil feels confident in his abilities largely because of the experience he gained with the city. He comments, “My experience in helping the city develop innovative loan programs that work in partnership with local lenders and my knowledge of resources serving small businesses have prepared me well for this next life phase.”
On a Mission
In 1982 the city of Charlotte incorporated the Charlotte Certified Development Corporation (CCDC) to “further the economic development and social welfare of Charlotte and Mecklenburg County by promoting business growth and development with a principal objective to increase employment opportunities and business expansion.”
In 2004, fueled by changes by the U.S. Small Business Administration (SBA) to promote improved delivery of the SBA 504 Loan Program, the CCDC changed its name to the Business Expansion Funding Corporation. The new name also better reflected BEFCOR’s market area and objectives to service businesses across the state.
One of the first items on Bargoil’s agenda is to help create a strategic plan and to help examine the organization’s mission: “What is our mission? Today, we don’t have an adopted mission statement but our working mission is to support business growth and development by helping business owners and lenders utilize innovative loan programs such as the SBA’s 504 Loan.”
Since its inception, one of the attributes of the organization has been its willingness to tackle the more difficult loans, the projects that some lenders might be a little hesitant to take on by themselves.
Companies such as BEFCOR that are working to support small businesses are playing a more active role in our economic growth than is immediately evident. Nearly 85 percent of the businesses in Mecklenburg County and the state are small businesses, though Bargoil is quick to clarify that this doesn’t in any way take away from the important role the larger corporations play in providing a strong foundation for growth. BEFCOR works closely with these small businesses, pairing them with banks, to obtain needed capital.
As Bargoil notes, “Small business in general is the economic engine of the state and the nation, so companies that are working to fund these businesses are really a step ahead of the game. The SBA 504 Loan Program and companies like BEFCOR really are one of the best kept secrets in North Carolina.”
BEFCOR’s success stories are very impressive. The company has assisted over 274 businesses in obtaining $94 million in SBA 504 loans. This represents approximately $235 million in new business developments and 5,800 new jobs created or retained primarily in the Mecklenburg county region.
Bargoil points out, “The 504 loan is really an economic engine within itself in growing businesses across the country.” By providing up to 40 percent of a project’s financing, the 504 loan appeals to both lenders and real estate brokers. And, because a bank provides only 50 percent of the financing, the risk is reduced on projects that it might not otherwise accept. The 504 portion of the loan offers long-term fixed-rate financing, improving the borrower’s cash flow and ability to invest savings back into growing the business.
It is important to Bargoil that organizations know that BEFCOR and the 504 loan program are aimed to assist more than just larger businesses: “We believe very strongly that we have a program that can reach the whole range of small business owners.”
However, despite the flexibility the 504 loan offers, he admits it isn’t for everyone. “Not everyone comes through the door ready for a 504 loan. But we know how to connect them to the resources they need to be able to do that, and when they are ready, we hope they will come back to us for help because of that established relationship.”
Investing in the Future
Right now, BEFCOR is entering a partnership with the city of Charlotte’s economic development office and will begin to help them in underwriting and supporting their existing loan portfolio. BEFCOR hopes to be able to expand this service to help other organizations and governments across the state. With its experience and working knowledge of the requirements to underwrite loans and the necessary steps business owners must take, BEFCOR is a valuable resource to others going through this process.
“We don’t see this as an organization that just provides one loan program, but instead as an organization that is truly an economic partner—an organization that can bring strong value to local governments and to lenders in understanding how to utilize loan programs like the SBA 504,” Bargoil says.
Bargoil has high hopes for BEFCOR. He says the 504 loans will continue to be their core business and the economic driver for their organization. This year they will begin to approach other organizations in other cities and offer their services and expertise. Bargoil is looking at the opportunity to support existing portfolios in other smaller cities across the state and build strategic relationships with them.
“We believe we have a system that allows us to come to the table and make this process as smooth as possible for both the lenders and the business owners,” says Bargoil. “Being a strong investment partner in this 16-county region and across the state, we can’t be everywhere, but we will continue to look for the places where we can be the most effective in helping organizations serving business owners to connect to resources within their respective counties.”
Because Charlotte and the surrounding counties are continuing to experience strong economic growth, there is an abundance of businesses that could benefit from the services BEFCOR has to offer. Bargoil explains, “We want to make sure that people are aware of this organization and position ourselves to provide a broad range of services so we can help companies find the working capital they need; we are looking to become a full service provider.”
As evidenced by their successful completion of 38 loans last year, 27 of which were in Mecklenburg County, BEFCOR is indeed a valuable economic development partner to the city of Charlotte, the region and the state of North Carolina.