The Winter 2012 edition of the Kansas City Federal Reserve Bank’s TEN magazine features one of the businesses that NEF has assisted with its gap financing, CD Guarantee product. NEF worked with First National Bank Northeast in Oakland to provide a guarantee to back a loan provided by the bank for a building expansion for Rief Design and Manufacturing. NED Inc., one of NEF’s program partners also participated in providing a micro loan for the collaborative loan package. Adam Rief joined his dad, Steve, after Adam graduated from the University of Nebraska Lincoln’s Mechanized Agriculture program to grow their business in rural Cuming County, Nebraska.
The article discusses how CDFI’s (like NEF) and micro lenders provide alternative financing that is often needed to assist small startup and expanding businesses. The Fed’s research shows that in the past couple of years traditional banks have shied away from small business loans even with federal recovery incentives. NEF has stepped up to partner with many banks across Nebraska to provide guarantee funds in the form of a certificate of deposit that can provide additional security for a bank loan. In some cases, NEF will provide a direct loan to a business as part of a collaborative loan package along with the bank or when a local bank simply can’t make the loan and refers the business to NEF or one of its program partners.