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Small & Minority Owned Business Loan

What is SMOB?

The Small or Minority-Owned Business Assistance Program provides a statewide platform that fosters the growth and development of small and minority-owned businesses in Tennessee.  The Program places emphasis on the preparatory stage of starting or expanding a business by ensuring that adaquate planning and financing are taken into consideration.

The SMOB Program provides assistance to Qualifying Businesses in two primary areas, Program Services and Loans.

“Program Services” provides access to an array of technical assistance, education, and consulting services to Qualifying Businesses that may or may not make application for Loans under the Program.

“Loan” means a loan for a specific project for which the applicant has requsted Program Assistance.  The following are acceptable purposes for which a Loan may be made:

  • Acquistion of Machinery and equipment
  • Working capital
  • Supplies and materials
  • Inventory
  • Certain other business-related activity

Lending for the acquisition of real estate is excluded from acceptable uses of funds.

Program Purpose and Eligibility

The Small and Minority-Owned Business Assistance Program was created by the Tennessee General Assembly by Chapter 830 of the Tennessee Public Acts of 2004. The Program is designed to support outreach to new, expanding, and existing Qualifying Businesses in Tennessee that do not have reasonable access to capital markets and traditional commercial lending facilities.

A Qualifying Business is a Sole Proprietorship, a Partnership, a Limited Liability Partnership, a Limited Liability Corporation, or any other Incorporated entity eligible to do business in Tennessee; and is located in and maintains operations in Tennessee with annual gross receipts of less than $4,000,000.

Businesses or Organizations that are Ineligible for Program Assistance are:

  • Churches
  • Non-profit Organizations.
  • Insurance Companies.
  • Real Estate Contractors or Developers.
  • Night Clubs or Similar Entertainment-Oriented Businesses.
  • Business that do not create or provide jobs.
  • Businesses not incorporated or located in Tennessee.
  • Businesses that do not meet the lending criteria of the designated Qualified Organizations (Lenders) for each region of the State.



Small and Minority-Owned Business Assistance Program (SMOB)

is available to small businesses with the 13 counties that the SCTDD services. These include: Bedford, Coffee, Franklin, Giles, Hickman, Lawrence, Lewis, Lincoln, Marshall, Maury, Moore, Perry, and Wayne.

The Small and Minority-Owned Business Program defines a loan as Program Funds lent for a specific project for which the Applicant has requested Program Assistance. For a business to participate in the loan section of the Program it must meet the SMOB Program criteria, as well as, the criteria of the designated lender serving their specific region of the State.  Lender critera varies from region to region, the Small and Minority-Owned Business Program criteria for loans consideration is as follows:

Loan Criteria

1.  The following criteria shall apply when Qualified Organizations evaluate Applications for Loans:

    (a.)  Maximum Loan Amount:  One hundred twenty-five thousand dollars ($125,000).

    (b.)  Loan Interest Rate: May be a fixed rate or variable rate, provide the variable rate does not exceed the maximum rate.

    (c.)  Maximum Loan Interest Rate:  2% over the  “Prime Rate” as published in the Wall Street Journal.

    (d.)  Minimum Loan Interest Rate: 2% under the “Prime Rate” as published in the Wall Street Journal .

    (e.)  Fees: Late charges and other fees may be imposed in accordance by Tennessee law.

    (f.)  Term: The recommended repayment periods for loans are as followed:

        1.  Equipment, the lesser of five (5) years or useful life;

        2.  Working capital, supplies, and inventory, three (3) years; and

        3.  Other business-related activity:  Lesser of five (5) years or useful life.

    (g). Collateral and Security:  Both business and personal collateral may be taken as security for a loan.

    (h). Guaranty Agreement:  Personal guarantees from all principal owners shall be obtained.




For a free consultation to help you decide if this program is right for you and your business, please contact us using the form below.

To begin the loan process contact us to set up an eligibility screening interview. The consultation is risk-free and can help you in deciding if the SMOB fund is right for you and your business needs. To see what information will be needed, follow the links below:


Following initial review, additional materials may be requested


Educational Resources


South Central Tennessee Development
101 Sam Watkins Blvd.
Mount Pleasant, TN 38474
Office (931) 379-2918
Fax (931) 379-2640

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