Guilford Gains Puts Taxpayers Behind Loans Banks Refused

Guilford County commissioners voted 8-1 on November 21, 2024, to put $400,000 of taxpayer money behind small-business loans private banks would not make. The contract pays Carolina Small Business Development Fund $50,000 a year for three years to run the Guilford GAINS Fund, a $25,000 to $75,000 loan-guarantee pool.

The county does not write those checks itself. CSBDF, a Raleigh nonprofit and certified community development financial institution, makes the loans. The county’s cash sits as a backstop if a borrower stops paying, which is the split District 3 Commissioner Pat Tillman flagged before he cast the only no vote.

The $400,000 Sits There as a Default Reserve

Board materials for the November 21 meeting described GAINS as a way to improve “small business access to capital and contracting opportunities with Guilford County firms.” The same packet said the money would stimulate the local economy “through the empowerment of entrepreneurial efforts which are expected to increase the population, taxable property, employment, or business prospects within Guilford County.”

That language sounds like a county lender. The mechanics are a guarantee. Shaunne Thomas, then director of the Minority and Women Business Enterprise Department, told commissioners at a June 11, 2024, work session that eligible firms would come in after a bank had already said no, and that CSBDF would fund the loan while the county stood behind it.

At the $75,000 cap, the reserve covers five full-size loans and leaves $25,000. At the $25,000 floor it covers 16. Either way, a handful of defaults can drain the pool, because each unpaid note reduces the $400,000 by that amount.

WHERE THE $550,000 GOES

The fiscal 2023-2024 county budget had already booked $450,000 to start a capital access program, a separate line from the November contract. The study that staff cited as the prompt, a 2023 disparity review that cost $300,000, had told the board that capital access was blocking smaller firms from county work.

CSBDF Collects $50,000 a Year Either Way

The November 21 vote locked a three-year vendor award: $50,000 a year to administer the money and a $400,000 guaranteed loan amount, for a $550,000 contract with CSBDF. The nonprofit is a 501(c)(3) with a stated mission of fostering economic development in underserved communities by providing capital, business services, and policy research.

Thomas walked the board through the risk in June. The county would lose money only if a borrower failed to repay, she said, and CSBDF staff would sit down with a struggling firm “through education” before that happened. Her pitch ended on a clean line.

The good news is that the CDFI funds the loan. They loan to the applicants, while we would actually guarantee the loan. We only actually lose that money as a county if one of the applicants did not pay the loan back.

Shaunne Thomas, then MWBE director, June 11, 2024, work session

That is the hidden split. CSBDF’s administration check does not depend on how many notes stay current. The county’s reserve does. Commissioner Carly Cooke told colleagues she was “really excited about it.” Thomas added, “And everybody’s happy.”

Borrower-side fees for GAINS have not been posted on the county site. CSBDF’s own Ignite product, a separate statewide loan, charges a 3% origination fee and a $150 processing fee that may be taken from proceeds, so the administrator already knows how to price a $75,000 note. Those Ignite charges should not be read onto GAINS unless the county publishes matching terms.

Seventeen Months Passed Before the Launch Night

The board endorsed the idea in substance on June 11, 2024, and told staff to bring back a contract. Five months later it approved that contract with little debate, according to the meeting record of November 21. Public launch came later still.

FROM WORK SESSION TO WORKSHOP

1. June 11, 2024: Commissioners endorse a loan-guarantee plan at a work session and direct staff to finish the CSBDF contract.
2. November 21, 2024: The board approves the three-year award on an 8-1 vote, with quarterly reports to the board written into the item.
3. April 30, 2026: The county holds the April 30, 2026 launch night at the Nussbaum Center for Entrepreneurship, 1451 S. Elm-Eugene Street in Greensboro, from 6 to 8 p.m.
4. June 5, 2026: CSBDF, announcing a $300,000 Wells Fargo grant, lists Guilford GAINS among its municipal programs, next to Durham LIT and an Alamance Chamber Momentum program.
5. October 15, 2026: The Small Business and Entrepreneurship Department hosts a 12 to 1:45 p.m. class on “Guilford Gains, Understanding Eligibility & How to Qualify.”

The county’s own account posted from the June 11 work session, with a photo of the board considering the guarantee. That post drew almost no public thread, which left the contract math as the main record of who is paid and who is exposed.

The Board considers a loan guarantee program under the county’s MWBE department in partnership with Carolina Small Business  Development Fund. pic.twitter.com/nDwsvBhleH

— Guilford County (@GuilfordCounty) June 11, 2024

Neither the county nor CSBDF has posted a public list of GAINS borrowers or a dollar total of notes closed. The 17 months between the vote and the launch night are the hard fact; the missing loan tape is the open one.

Who Can Borrow, and What the First Draft Required

The first written plan was narrower than a general start-up shop. County language circulating with the June work session tied the money to firms that already had, or were about to have, county work, and it used that contract as collateral.

THE JUNE 2024 ELIGIBILITY DRAFT

• HUB paper: Prime contractors or subcontractors had to be certified as a North Carolina Historically Underutilized Business.
• Local market: The firm had to operate in the Guilford County relevant market.
• County work: Eligibility required a new contract or subcontract with Guilford County.
• Collateral: That county contract or subcontract would secure the working-capital loan.
• Uses: Proceeds could cover mobilization, equipment, and added workers needed to perform the job.

Thomas told the board that capital access was “truly a barrier to competing in contracts,” and that federal and state studies named it the top barrier for small minority-owned firms trying to do business with cities and counties. The goal, she said, was to get those firms to a point where regular banks would take them.

After the November vote she said male-owned and non-minority-owned businesses would be allowed to apply as well. Madison Potter, a CSBDF business solutions officer, later described the loans as $25,000 to $75,000 for existing businesses, typically those operating at least two years, and said CSBDF could help a firm start county Small Business Enterprise certification if it did not already have it. The published county site still has not posted a full, dated eligibility sheet that reconciles those versions.

Pat Tillman Asked Who Eats a Bad Loan

Tillman, the District 3 Republican first seated on December 5, 2022, with a term that ends December 7, 2026, asked a staff question that the rest of the board did not linger on. If a business did not repay, would the county be liable? The answer was yes. He voted no. The motion still passed 8-1.

Staff had already conceded the legal problem the structure is built to dodge. North Carolina counties are not supposed to loan public money to private companies. A guarantee, routed through a CDFI that actually books the note, is the workaround. Chairman Skip Alston’s line at the June session was that Guilford did not need to invent that path.

“We don’t have to reinvent the wheel if Durham County has already done it,” Alston said.

Thomas is no longer titled as MWBE director. A county release on April 24, 2025, named her executive director of Small Business and Entrepreneurship, the department that now organizes GAINS events at the Nussbaum Center. The program still sits in that shop, even though officials have said non-minority firms may apply.

Durham Already Ran This Playbook

CSBDF’s business is municipal lending partnerships, and Guilford is one logo among several. The same June 5, 2026, note that named GAINS also named Durham LIT and Alamance Momentum. CSBDF’s own menu still advertises loans of up to $75,000 statewide under Ignite, a product it launched in April 2025 for North Carolina firms that have been open at least two years.

Ignite’s posted rules are stricter on credit hygiene than the June GAINS draft was on county-contract collateral: no unsatisfied judgments, no bankruptcy in five years, no repossession or foreclosure in three, fewer than $1,000 in non-medical charge-offs, and no more than five 30-day delinquencies in 24 months. Terms run up to 84 months, fully amortizing, with rates tied to Prime. In the first quarter of fiscal 2025-26, CSBDF said Ignite alone booked 32 loans totaling $1.75 million.

Durham’s older vehicle is different in size and origin. The city and county’s Durham Small Business Opportunity Loan Fund, also held and run by CSBDF, offers $5,000 to $35,000, 12 months of interest-only payments, and no collateral. It began in 2020 as a pandemic recovery pool that sent about $800,000 to 38 owners; a later city tally put the total above $1 million to 45 firms, 71% of them minority-owned and 43% women-owned.

THREE CSBDF PRODUCTS, THREE PUBLIC BACKERS

Guilford is buying a branded county window on a lender that already works this beat. The $50,000 annual fee is the price of that window. The $400,000 is the price of the defaults.

October 15 Classes Still Walk Through Eligibility

A Thursday, October 15, 2026, workshop at the Nussbaum Center, billed by the Small Business and Entrepreneurship Department, is set to cover GAINS eligibility, the application steps, common requirements, and how a firm that does not yet qualify can get there. An evening session the same date at Guilford Tech’s Small Business Center lists Potter as the speaker on how to build a loan package.

That is the current public face of a contract approved in 2024: classes on how to become eligible, a launch night that arrived in 2026, and no posted ledger of who has borrowed. The November 21 item called for quarterly reports to the board. Those reports, if they exist in the packet, have not been summarized as a borrower list.

Tillman’s question still sits under the file. CSBDF is paid to originate and to coach. The county is paid, if a note goes bad, with the reserve it set aside. Owners who cannot clear a bank still have a window, and the window is the size of $400,000.