Mountain Association for Community and Economic Development

For small business owners and aspiring entrepreneurs, the right financing can make all the difference. Unfortunately, not all lenders have your best interests in mind. 

Online lenders often promise fast cash and easy approvals, but those offers can come with high costs and long-term financial stress. Community Development Financial Institutions (CDFIs) like Mountain Association take a different approach, focusing on your long-term success while still delivering financing decisions quickly. 

Predatory Lending vs. Community Lending 

Predatory lenders often market themselves as a solution for businesses that don’t qualify for traditional bank financing. They advertise same-day approvals and minimal paperwork, but those conveniences can come at a steep price. Many charge extremely high interest rates, add hidden fees, or require daily or weekly payments that put pressure on cash flow. 

We’ve seen annual percentage rates (APRs) ranging from 40% to more than 350%. In some cases, business owners end up repaying several times what they originally borrowed, making it harder to invest in growth and build financial stability. As an example, a small business in Leslie County was having to pay $1,300 per week to a predatory lender. 

At Mountain Association, we believe financing should create opportunity, not become a burden. As a CDFI, we work with entrepreneurs who may not qualify for conventional financing and help strengthen local economies across Eastern Kentucky. 

Our loans range from $1,000 to more than $1 million, with interest rates typically between 5% and 9.75% and flexible repayment terms. We also offer solar financing at a fixed 4% interest rate with terms up to 20 years. For loans under $50,000, decisions are often made within 2 to 10 business days once all required information is received. 

More Than a Loan 

One of the biggest differences between Mountain Association and many online lenders is the relationship we build with borrowers. 

While predatory lenders often rely on automated systems and provide little support after approval, our team takes the time to understand your goals, challenges, and opportunities. Whether you’re starting a business, purchasing equipment, expanding operations, or strengthening working capital, we’ll help identify the financing option that best fits your needs. 

Our lending process is transparent and supportive. We’ll explain the terms, answer your questions, and make sure you’re comfortable before moving forward. We also connect entrepreneurs with free business coaching, technical assistance, and additional resources to help build a stronger foundation for success. 

Financing Designed for Growing Businesses 

We also structure loans differently than many traditional and online lenders. 

For larger equipment purchases, we typically pay vendors directly. For smaller purchases, borrowers can submit receipts for reimbursement. This approach often benefits businesses because they only make payments on funds that have actually been disbursed, rather than on the entire loan amount from day one. 

We also prioritize accountability and flexibility. While we offer working capital loans when appropriate, many of our loans are structured around specific business investments. 

Another important difference is our approach to collateral. We work hard to separate business and personal assets and avoid using personal assets as collateral whenever possible. To address collateral gaps, we may utilize a collateral support fund through the Foundation for Appalachian Kentucky or share risk through lending partnerships. 

Work With Us 

We’re proud to offer financing that helps people build businesses, create local jobs, and strengthen their communities. 

If you have a business idea or are ready to grow an existing business, choosing the right lender matters. Mountain Association is committed to providing fair, affordable capital along with the guidance and support entrepreneurs need to succeed. 

Learn more at mtassociation.org/lending 

The post Avoid the Business Debt Trap: Know the Difference Between Predatory and Community Lenders  appeared first on Mountain Association.

Nearly 50 years ago, two young organizations were both getting their start. 

In 1978, Sammy Hammons and his mentor, Tommy Brown, founded B&H Toolworks in Richmond with a vision of building a world-class manufacturing company in Kentucky. At nearly the same time, Mountain Association, founded in 1976, was beginning its work to expand economic opportunity across Appalachia by investing in local businesses and local leaders.  

B&H Tool Works has grown from a small startup into a sophisticated manufacturer serving industries ranging from automotive and aerospace to defense and transportation. 

Tommy was a respected metal worker and machinist educator at Eastern Kentucky University, and had first met Sammy as a student. With Sammy’s interest in tooling and machining, the two men began to partner, taking on repair work and small jobs that came their way.  

“It was a hobby shop. Something we loved to do,” Sammy said of the early days. 

The business grew quickly. In its first year, B&H generated about $30,000 in revenue. By year two, sales had climbed to $100,000, and the company had opportunities that suggested it could reach $750,000 the following year. The challenge was financing that growth. 

At the time, Mountain Association, then known as MACED, was also just getting started in community economic development. We were founded with a primary purpose to work alongside entrepreneurs to help strengthen businesses from the inside out. However, after a few years, staff realized entrepreneurs like Sammy and Tommy weren’t able to access financing from traditional lenders.  

Launching our loan fund in 1981, B&H became one of the organization’s earliest loan clients and one of our longest lasting success stories, but the growth was not without challenges. 

More than a Loan 

As MACED and B&H began to work together on the business’s projections, MACED staff found that while demand was strong, management systems needed improvement. B&H’s accounting indicated a small profit, but a deeper analysis revealed it was actually operating at a loss. Instead of shying away from the risk, MACED worked with B&H’s leadership to develop a plan for growth, improve management practices, and invest in needed equipment. 

Based on that plan, MACED provided $100,000 in financing, as well as hands-on business support. Within just three months, B&H grew from 12 employees to 21 and became profitable. 

Sammy and Tommy were then able to purchase land and build a 1,200-square-foot facility. Demand continued to grow, helped in part by opportunities connected to Toyota’s arrival in Kentucky. Then came a major setback. A lawsuit involving the original property owner dragged on for three years, making traditional lenders hesitant to provide financing just as the company needed working capital most. 

“We were growing with no cash flow,” Sammy recalled. 

Looking for help, he again contacted MACED.  

“They sent Ed McCormick out here. He audited us, and we hit it off great.” 

Over the years, McCormick became a trusted advisor. MACED helped B&H modernize its accounting and management systems, purchase equipment, and eventually expand into Rockcastle County. 

“We got all the creditors all lined up, but we didn’t have enough to put down,” Sammy said of the expansion. 

They worked with our Lending Team on a creative arrangement of a preferred stock investment that provided the capital needed to open that second facility. Later, B&H was able to buy out that investment, creating what Sammy describes as “a win for everybody.” 

The People Behind the Numbers 

For Sammy, yes, the equipment, square footage, and sales figures over the last five decades matter, but his greatest success is 110+ employees. 

“What I’m most proud of is providing good quality jobs. We probably spend over $5 million a year in payroll. And we have workers who’ve been here three to four decades, and many who have happily retired.”  

During a recent tour of B&H, Sammy walked us through the now 120,000-square foot Richmond facility, stopping every few minutes to introduce his staff. At nearly every workstation, there was a story worth telling—some employees had spent more than 30 or 40 years with the company and were approaching retirement. A newer hire was only on his third day of work. Then there was a young employee whose father and grandfather had both had careers at B&H. Now he is building a career there himself after graduating from technical college. 

As Sammy introduced each person, he knew their histories and their families. He spoke to the role each has played in building the company that generates millions in sales each year, feeding automotive and other industrial clients like Toyota in Georgetown and Link-Belt with essential metal parts. 

For those of us who work in community economic development, getting to see Sammy with his employees and, to think of how we helped get this started all those years ago, was a great reminder of why this work matters. 

“The field of economic development often equates success with how many jobs are created and saved. Those numbers are important, but they aren’t the whole picture of how meaningful investments can be,” said Leslie Ferguson-Oles, Mountain Association’s Chief Advancement Officer. “Every person Sammy introduced us to as we walked represented a story, a family, and a career.”  

As Mountain Association celebrates its 50th anniversary, B&H Tool Works’ growth from a small startup into a sophisticated manufacturer, now serving industries ranging from automotive and aerospace to defense and transportation, stands as a powerful example of what can happen when we invest in Kentuckians.  

To learn more about our 50 years of history, please visit here.

The post Forging a Future: How B&H Tool Works and Mountain Association Grew Together over 50 Years  appeared first on Mountain Association.