The pot of money uses interest, like a normal loan would, to make payments on past ones so it keeps itself alive. The range of loan amounts that would be available to applicants is still being worked out.

“So the whole point of it is to build up a pool of money that we can use to support small businesses and entrepreneurs with new ideas, micro-enterprises, any of those kind of special small business initiatives that people come up with,” said Ryan Weaks, communications and marketing director for the Alliance.

The Alliance is asking for donations of $140 — or any other amount — to reach its goal of $140,140.40 by the end of the year. 

“It really fills a gap in funding,” he said. “We have a lot of great banks and providers in the region, but they don’t give out these smaller type of loans. So this helps small businesses get that small amount of money that they need to really make their idea a reality.”

Weaks said the Alliance sees a lot of small businesses owners starting out who have to raise money through GoFundMe or asking for donations from family members.

“We wanted this to be a way that we can give back to the community,” he said. “And $140 is a good amount of money but still reasonable for people to donate.”

When the goal is reached, the Alliance will begin taking applications that will go through a review board, and then loans will be monitored by its foundation.

Megan Lucas, CEO of the Alliance, said the organization as well as the Small Business Development Center in Lynchburg surveys and tracks small businesses’ and entrepreneurs’ startup hurdles.

“One of the hurdles that our startups and small businesses have communicated is gap financing and so we charted a course to stand up a regional revolving loan fund and to be another source of revenue for them to come to for support,” she said.

Lucas said its revolving loan fund is a structure loan fund that uses interest and principal payments on past loans to issue new ones.

These loans provide access to flexible sources of capital that can be used in combination with more conventional sources.

There will be a pre-application process, and if a candidate gets through that process, they’ll be able to complete the full application and that that will go before review board.

“We have a very good entrepreneurial ecosystem in the region and one of our goals is to continue to grow and support that,” she said. “Another goal is to sustain our growing small business community that may hit a hurdle from time to time and may need additional support.”

Luke Towles, a commercial banker with Pinnacle Financial Partners and past Alliance board chair, said banks don’t typically lend to startup businesses, and this is what the Alliance is focused on for the 140 Fund.

“[The Alliance is] focused on someone who’s got a new idea, they’re writing their business plan and they need some startup capital to help bridge them through the first couple of years,” he said. “Typically, banks don’t lend money on that.”

He said the Alliance’s revolving loan fund is intended to help get somebody started.

“And so there’s an inherent risk that is being taken, but it’s a risk that the community wants to take because they want to help business grow,” he said. “But the banks may not even be able to take that risk even if they wanted to, because of regulation and things of that nature. So they’re not really set up to take on that kind of risk.”

He said this fund is a continuation of providing products, services and resources to the business community in the region.

“So it’s really a gap in our region that we’re looking to fill and with the hopes that we then can help entrepreneurs get started and grow their business here in Lynchburg,” he said. “It’s just helping businesses grow and thrive in our region.”