Increasing Access to Capital in Rural Areas:  A Program Developed to Drive Private Investment in Rural Ohio

The Congressional Research Service notes in An Overview of Rural Credit Markets notes that access to financial services, specifically credit products, varies in rural areas as compared to urban areas.  The Federal Reserve concluded that 40% of rural counties lost community bank branches between 2012 and 2017.  Nonbank financial firms are often found in metropolitan areas, leaving rural businesses more dependent on traditional bank loans to finance operations, but with the number of bank branches decreasing in rural areas, rural companies may find limited access to the credit needed to fund growth and retain & create jobs in these rural areas.

Ohio is the 7th most populated state in the nation, and 2.4 million Ohio residents live in rural areas.  With the goal of supporting businesses providing stable and quality jobs in these rural areas, Stonehenge Capital, in partnership with the State of Ohio, recently launched its second Rural Ohio fund focused on investing in Ohio small businesses located in counties with less than 200,000 residents.  This $25 million fund will provide flexible capital to fund business expansion, equipment purchases, or working capital for businesses located in or relocating to rural Ohio locations, with priority given to investments that have meaningful job creation.   Seeking to diversify the capital solutions available in rural Ohio, the fund will make non-bank senior debt, mezzanine debt, and equity investments ranging from $1 million to $5 million with flexible terms.

Stonehenge’s first Rural Ohio Fund, launched in 2018, had similar characteristics and was invested across a diverse set of industries, ranging from technology companies to manufacturers to service companies.  Investments included subordinated debt for a manufacturing company looking for working capital, senior debt for a packaging company in need of upgraded equipment, and convertible debt for a technology startup with experienced sponsors.  The patient capital provided by Stonehenge has enabled job creation throughout rural Ohio.

Stonehenge is also currently managing a larger, national debt fund, the Stonehenge Community Impact Fund, which makes loans to businesses operating in underserved communities across the country. These underserved communities include low-to-moderate income census tracts, rural communities, or other areas targeted by other economic development programs (Opportunity Zones, TIF districts, Disaster Areas, etc.). The Impact Fund seeks to support companies having a positive impact on their communities, which may include backing minority or women-owned businesses, creating jobs, or generating other positive social impacts. The Impact fund is actively looking to make senior loans between $5 million to $15 million with flexible structures and terms. For additional information, please contact Keith Jones ( / (614) 545.7255) or Brent Sacha ( / (214) 599.8852). About Stonehenge Capital:  Since 1999, Stonehenge Capital has operated at the nexus of finance and community development.  As a nationally recognized specialty finance company, Stonehenge knows how flexible investment capital can transform underserved communities and help operating businesses grow, in turn creating stable and quality jobs in the community.  Stonehenge has deployed over $1.1 billion into low-income communities, including several loan funds with place-based strategies designed to address the needs of small businesses in areas that have traditionally lacked access to capital.