Heirs Property and You in North Carolina

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1 Heirs Property and You in North Carolina Strategies for Making the Most of Your Family Land Introduction If you and your family are owners of heirs property, one of the biggest challenges that you may face is making a decision about how you want to use your land in the future. Land ownership offers an array of opportunities that can be tailored to fit your family s needs and goals, and this brochure provides information about a variety of land-use options that your family may want to consider. Before you begin making concrete plans, however, it is important to ensure that you and the other heirs property owners are effectively organized so as to make collective decisions. Forsyth County, North Carolina, farmland in the foreground of the Winston-Salem skyline. Photo credit: Bob Nichols, Natural Resources Conservation Service, United States Department of Agriculture. Heirs Property Retention Coalition

2 First things first: Clearing Up Ownership and Making Collective Decisions Determining Owners Before you can pursue new and creative uses for your land, you must legally determine who else owns shares in your property. You will not be able to develop your land without the consent of the other landowners, so it is important that you identify who else shares ownership of the land and include them in the decision making process. Ask yourself questions like, Are all of the co-owners family members? Has one relative ever sold a share to someone outside the family? Once you have determined who the other owners are, you will be ready to start organizing yourselves to make decisions. Making Decisions Collectively We all know that getting a large group of people to come to an agreement can be a difficult task, even when it is a group of your closest relatives. Making decisions collectively with your fellow heirs about the future use of your land is no exception. But it is important to know that under the law, every person s voice must be heard because each heir s interest in the property is considered undivided. This means that regardless of how small an heir s share in the property is, she/he has a right to use the entire parcel of land. Resolving Disputes If you and your family are finding it difficult to make a collective decision about how you want to use your property, there are several mediation resources available through the North Carolina Heirs Property Resource Center. These services can help you resolve disputes about who owns interests in the property, who has rights to use the property, and what future plans for developing the property will look like. They can help identify points of contention and help each person involved understand the perspective and interests of every other person. Finally, these services can provide a positive environment for you to discuss your disputes and work towards an agreeable solution. Reconciling Current and Future Land Use In many heirs property situations, a small number of heirs currently lives on or actively uses the property, while many others rarely even visit it. This could create conflicting interests. Mediators can help reconcile the way in which the property is currently being used with how the family wants to use it in the future. Often, the rights of the current

3 First things first: Clearing Up Ownership and Making Collective Decisions inhabitants can be addressed through legal agreements called Tenancy-In- Common Agreements, which are agreements that set out the ownership rights and responsibilities among all of the owners. In other cases, families may decide to establish a Limited Liability Company (LLC) or a Land Trust as legal entities in which to consolidate ownership. After being established, these legal entities can manage the future use of the property. A mediator can help you decide which legal options are best for your particular circumstances. Please see the Preserving Your Property brochure for more information on these and other legal issues related to your property. Please see below for a list of mediation services available through the North Carolina Resource Center. Pasquotank County Courthouse, Elizabeth City, North Carolina. Photo credit: Calvin Beale, Economic Research Service, United States Department of Agriculture. When deciding how to use your land, there are many different options to consider. Before selecting an option, you should think about why you value your family s land. Do you value it because ownership of land is a great opportunity to enhance your family s income? Or because the land has historical significance for your family? Or because you enjoy the family tradition of farming on your land? Whatever your interests, there are a variety of options that you can choose from and combine in order to promote all of your family s goals and values.

4 Your Property as an Asset: Using Your Land as a Source of Financial Opportunity Ownership of property can provide you with a great opportunity to enhance your family s income. One option is developing a small business on your property that would be a source of revenue as you continued to own and manage it throughout the years. Another option is developing your land for commercial or residential use and then selling the property to an individual or company. The possibilities are limitless, and your small business or development project can be tailored to fit both your talents and the unique characteristics of your property. If you do not wish to develop a business venture and do not intend to use your land on a regular basis, you can still gain financial advantage by donating your land for estate planning. This is an excellent option for ensuring retirement income for you and other beneficiaries. Continue reading for more information regarding these three options: Start a Small Business There is a wide range of goods and services that your new small business could provide. The following are a few examples of small businesses: Retail development: Retail development may include opening a store, restaurant, or café on your property. Or you may consider building and managing rental retail space. Wholesale development: Wholesale development can include larger business activities such as opening a warehouse or an industrial plant. Office / Commercial Space: You may also consider developing office and other commercial space to rent. Small farming: Farming can be a small or large part of your plans for your property. You may view it as a hobby, a source of additional income, or your primary occupation. Small farming has several benefits: as a small farmer you can use your land productively while preserving its natural beauty; you can choose from among a variety of crops, depending on the soil on your property; and you may qualify for property tax benefits that North Carolina offers for land used for agricultural purposes. For more information about these property tax benefits see NC ST

5 Agritourism: Agritourism is an increasingly popular form of small business among farmers. Essentially, owners of farmland open their property to tourists that are looking to enjoy the natural landscape, learn about farming, or participate in a variety of outdoor activities. Trips to farms can range from a short day trip to a weeklong vacation. Although there is no limit to the types of activities that can be the focus of successful agritourism, some ideas include farm tours, community-based farming, farmers markets, camping, fishing, hiking, biking, hay rides, petting zoos, bed-andbreakfasts, or outdoor events such as weddings, holiday festivals, and performing arts. Recreation development: Developing your property for outdoor recreation is another development option. This can include developing scenic areas, retreat centers, parks, or public sports facilities. Duck hunting in Swanquarter National Wildlife Refuge, North Carolina. Photo credit: Dr. F. Eugene Hester, United States Fish and Wildlife Service What steps do I take to start my small business? No matter what type of business you decide to pursue, there are some common initial steps that should be taken by every aspiring small business owner. 1. Consider your own investment: Throughout the planning process, it is important to keep in mind what you and your family are prepared to invest into your small business or development. This does not only mean any financial investment you are able to make, but more importantly what kind of time and labor investment you are willing to commit to your project.

6 2. Business Plan: Before you spend any money or invest too much time in your business idea, it is essential that you write a detailed business plan. This business plan will become the blueprint for turning your dream into a reality. It should address every aspect of your business, including: Business goals Products/services it will offer Customer demand for these products/ services Advantages your business will have over competitors Pricing strategy Budget Monthly cash flow Break-even point Advertising and marketing strategies Who will own the business Legal structure Management Production and delivery service Necessary personnel Necessary equipment 3. Legal Structure: After creating a business plan, you must determine the appropriate business structure. Different business structures have different tax and liability benefits. Work with a lawyer to determine which structure would be the best suited for your business. Some examples of common business structures are sole proprietorships, general and limited partnerships, C and S corporations, and limited liability companies (LLC). 4. Other Legal Considerations: There are many additional legal issues you will have to address as you move forward, including: Business Licenses Building codes, permits, zoning Registering business name Business insurance Taxes, including business tax, sales tax exemption certificate, income tax, payroll tax Employment regulations Safety and health regulations Copyrights, trademarks, and patents Please see below for a list of organizations that provide services designed to help you plan your small business or development projects.

7 How do I finance my small business? Starting a business requires a serious initial investment of time, energy, and, of course, money. But starting a small business does not require you to be independently wealthy. There are many sources of financial assistance available for aspiring business owners, ranging from grants to loans. Before applying for a grant or loan, you must first prepare a business plan that details what resources you will need to meet your business purpose. You must also be prepared to discuss your personal contribution to your business, how much you will need to borrow, how loan money will be used, what you will use for collateral, and how your business will be able to repay the loan in a timely manner. Please see below for a list of organizations that provide loans for small businesses as well as expert advice on financing a new business venture. Can my small business be a co-op? A cooperative (usually called a co-op) is a business that is owned by, and operated for, one group of individuals. Rather than forming and financing your own small business, you could go into business with other members of your community who share your same interests. Usually, co-ops are democratic and have open membership, which means that anyone would be able to join if they were willing to invest the right amount of time and money into the project. One of the disadvantages of creating a co-op instead of starting your own small business is that profits are generally lower because only members are eligible for reduced prices. However, a co-op is beneficial because all members pool their resources, work together to operate the business, and can buy the goods and services for a reduced price. See below for information on an organization that specializes in helping cooperatives. Develop Your Land for Sale If you do not wish to manage a small business or own your property in the future, you can develop your land for commercial or residential use and then sell the finished product to. Developing your land will increase the value of your property and, consequently, the price that you can sell it for.

8 What types of development options are available to me? As mentioned under small business, you can develop your land for commercial use through retail or wholesale development. Another alternative is developing your land for residential use by building houses or apartments on your property. What steps do I take to develop my land for sale? Although the ultimate goal behind developing your land for sale is different than starting a small business and retaining ownership of it, many of the steps are the same. In both, you will need to consider your own investment, put together a business plan, and take into account legal considerations such as licenses, permits, etc. See What steps do I take to start my small business? on page five for more information about this process. Donate Your Land for Estate Planning Cypress swamp, Great Dismal Swamp, Camden County, North Carolina. Photo credit: I.C. Russell, United States Geological Survey. If you no longer use your property or no longer want to manage your land, you may consider using your property to plan for retirement. A donation can be structured to provide regular payments to beneficiaries in exchange for the donation of land. Such an arrangement can be an effective means of ensuring retirement income for owners.

9 What are my options? A Charitable Remainder Trust: A charitable remainder trust is an agreement where the landowner establishes a trust and donates his/her land to that trust. The trust then sells the assets of the property and reinvests the sale proceeds. The trust then makes regular payments to a list of beneficiaries established by the original landowner. After the last beneficiary dies, or after a time period specified by the original agreement, the remaining assets of the trust are then distributed to a charity according to the agreement established by the donor at the time the land was donated to the trust. The gift qualifies for charitable income tax deduction at the time the land is donated to the trust, based on the value of the land less the expected value of the trust payments. A charitable remainder trust is one way to avoid capital gains tax. Since you donate the property, you do not have to personally pay capital gains tax on your property s appreciation. Furthermore, since most trusts are tax exempt organizations, the trusts generally do not have to pay capital gains taxes when they sell and reinvest the trust s assets. Charitable Gift Annuity: Similarly, a charitable gift annuity allows a landowner to donate property to a charity in exchange for the charity agreeing to make regular annuity payments to specified beneficiaries. Here, however, the landowner agrees up front to donate a specific percentage of the asset to the charity rather than merely the remainder that is left after all payments to beneficiaries have been made. The gift of the property to the charity qualifies for charitable income tax deduction at the time of the gift, based on the value of the land less the expected value of the annuity payments. Who will the beneficiaries be? When making your donation, you can specify who you want to include on the list of beneficiaries that receive regular payments. How will the income to the beneficiaries be taxed? The annuity rate is based on the age of the beneficiaries. A portion of the payment is received tax free. Some of the annuity payment may be subject to capital gains tax if it is funded with appreciated property. The remainder of the annuity payment will be subject to ordinary income tax.

10 Your Property as a Natural and Cultural Resource: Protecting, Preserving, and Enhancing Your Land Your property may mean more to your family than simply the opportunity to increase your wealth. Your property may have great historical significance to your family, or your family may wish to protect your property s natural resources. Continue reading for three options that will preserve your property as a natural and cultural resource. Establish a Conservation Easement: Protect Your Land for Future Generations If your main interest is to protect the resources of your property in their current form, you can establish a conservation easement, which will forbid future owners of your property from engaging in certain activities that could damage the cultural legacy and natural beauty of your property. When establishing a conservation easement, you grant the development rights for your property to a government agency or a non-profit conservation organization on the condition that the agency or non-profit organization will not permit any future development on your land. What kind of restrictions can I place on the development rights of future owners? Conservation easements can be customized to best fit your interests. You can restrict the rights to develop entirely or merely restrict the rights to build certain types of structures. You can also choose to restrict development on only a portion of the land. How long does this protection last? Sandhills region of North Carolina. Photo credit: S. Miller, United States Fish and Wildlife Service. Most easements are permanent and automatically pass to future owners along with the title of the property. If you sell your property, not only will future owners be bound by the easement and not have the right to develop the property, but they will not be able to remove the protection, since they never purchased the right to develop the property in the first place.

11 Can I still use my property? Yes, you can continue to live on and use the property even after establishing the easement. How do conservation easements work? Creating an easement can happen either through donation or sale--you can either donate or sell the easement to a non-profit organization or a government agency. Depending on the type of land you have, either the state agency or non-profit organization will then be in charge of enforcing the easement to ensure that neither you nor any future owner of the property violates its terms. Some conservation organizations have funding available to purchase these easements. Other organizations accept donations of conservations easements. Are there tax benefits to donating a conservation easement? Yes, donating conservation easements can result in four different types of tax benefits. First, the easement will be considered a charitable donation, which can provide an income tax deduction. Second, when you sell or donate an easement it reduces the value of the land because it restricts future development. As a result, the government will subtract the value of the lost development rights from the property tax burden, which means that your property tax would be reduced. North Carolina wetland. Photo credit: North Carolina Department of Transportation. Third, conservation easements also lower the estate tax burden, making it easier to leave the property to your children. Finally, North Carolina will give you a state income tax credit equal to 25% of the value of the donated easement. This credit can be carried forward for five years. Please see below for a list of organizations that specialize in enforcing conservations easements. Transfer Your Property to a Land Conservation Organization (Land Trust): Preserve the Natural Resources of Your Land In addition to establishing a conservation easement, you can also donate your property to a land conservation organization (sometimes (confusingly!) referred to as a land trust) that will ensure that the natural and cultural resources of your property will be preserved.

12 What is a land conservation organization? A land conservation organization is a private, non-profit organization created to acquire and protect environmentally, historically, or culturally valuable places. Land conservation organizations work locally to protect farms, forests, animal and plant habitats, lakes and streams, parks, and scenic vistas that are treasured by the communities they serve. For more information regarding land conservation organizations in North Carolina, visit the website of Conservation Trust for North Carolina at The Neuse River in eastern North Carolina. Photo credit: LaVonda Walton, United States Fish and Wildlife Service. How do I transfer my land to a land conservation organization? When transferring your land to a land conservation organization, you have two options: you can either transfer all of your land to the organization or you can transfer only certain property rights (this is called an easement and is discussed on page ten).

13 Is it possible to sell my property to a land conservation organization? Some land conservation organizations do have the capacity to buy land if the land is very important for conservation purposes, but most only accept land that is donated. Are there tax benefits associated with donating land to a land conservation organization? Donating your property to a land conservation organization) will entitle you to a larger income tax deduction as well as relieve you of the burdens of paying property taxes. This technique allows you to donate to a land-conservation organization today while retaining the right to continuing living on the property for the rest of your life. This right is known as a life estate in the land. The land conservation organization gets the land after you die, in other words, the remainder. Even if you continue living on the property, you may still be eligible for an income tax deduction at the time that you make the donation. Please see below for a list of organizations that specialize in donations made to land conservation organizations (land trusts). Participate in the North Carolina Forest Service Programs: Enhance the Natural Beauty of Your Land If you are interested in augmenting the value of your land s natural resources, rather than preserving it through conservation easements or conservation trusts, the North Carolina Forest Service offers a number of programs that would allow you to enhance the natural beauty of your property and to practice sustainable resource management. The programs range from planting trees on forest land to converting farm land into permanent vegetative cover. The Forest Service will provide expertise and, in some cases, funding to help further these projects. Here are a few of the programs available: Conservation Reserve Program: This program is designed to encourage farmers to convert highly erodible cropland and other environmentally sensitive land to vegetative cover. The Farm Service Agency (FSA) will reimburse up to 50% of the cost of establishing permanent vegetative cover, which can include growing trees, creating a permanent wildlife habitat, or growing permanent native grasses and legumes. Interested landowners may contact their local FSA office.

14 Conservation Reserve Enhancement Program: This program, currently targeting counties in the Chowan, Neuse, and Tar- Pamlico river basins, is designed to address water quality, soil erosion, and wildlife habitat concerns by incentivizing wetland restoration, hardwood tree planting, and planting vegetative buffer zones near streams. This is done by offering annual rental payments, cost share payments, and other incentive payments to landowners on 10, 15, or 30 year contracts. To qualify, land must have been either cropland that was row cropped 4 out of 6 years from 1996 through 2001 or be marginal pasture land adjacent to perennial or seasonal stream that was grazed during the same period. Debt for Nature Program: The Debt for Nature program is a federal program that allows landowners with outstanding FSA loans to reduce their debt in exchange for a conservation contract. During the term of the contract, ranging from 10, 30, or 50 years, the landowner agrees not to develop land in exchange for debt relief. Eligible lands include wetlands, highly erodible lands, and areas of high water quality or scenic value. Woodland swamp in Robeson County, North Carolina. Photo credit: W.H. Monroe, United States Geological Survey. North Carolina Forest Development Program: This is a cost sharing program administered by the North Carolina Division of Forest Resources that partially reimburses landowners who use their land to establish new forests. Under this program, a landowner can get partially reimbursed for the cost of forest-building activities such as planting trees or removing unwanted plants. In order to qualify for this program, the landowner must write a forest management plan and have it approved by the NC Division of Forest Resources. Agricultural Cost-Share Program: This program is administered by local Soil and Water Conservation District Offices and reimburses landowners for the cost of converting fields and pastures into permanent vegetative cover, including trees and wildlife cover. The program will reimburse landowners up to 75 % of the average cost of control practices used. Forest Stewardship Plan: The NC Division of Forest Resources will provide landowners with technical assistance in developing a stewardship management plan, which is a plan designed to be consistent with the landowner s objectives while enhancing the forest for wildlife, soil and water quality, timber production, recreational opportunities, and natural beauty.

15 Forest Legacy Program: This program was created by Congress in 1990 to help states protect environmentally important forest areas that are threatened by conversion to development and other non-forest uses. It focuses on working forests, which are forests that provide forest products; water, fish and wildlife habitat; and recreational opportunities. Through this program, the North Carolina Forest Service will purchase conservation easements at fair market value. Harvesting your forest: Local offices of the North Carolina Division of Forest Resources are available to help landowners develop plans to harvest their forests. The Benefits of Donation: Understanding Why You Might Want to Give Your Land Away Three of the options presented above donating your land for estate planning, establishing a conservation easement, and transferring your property to a land conservation organization offer you the opportunity to donate your land to a charity or non-profit organization. You might be wondering why you would want to give your property away rather than sell it or develop the land yourself. Aside from being of great benefit to the recipient organization, donations can provide important tax benefits. Donations can be particularly beneficial if the burdens of paying property taxes have exceeded the value of holding the property. Combine Multiple Land-Use Options: Balance All of Your Family s Interests If your family is having trouble choosing one goal or one plan for the property, it is possible to combine many of the land-use options listed above. For example, you can enhance the total value of your property by using it as a source of revenue while still protecting the natural beauty of the land. This can be done by choosing a business option, such as agritourism, that use the unique natural resources of your property as an economic advantage. Alternatively you can structure a conservation easement that protects most of the land while allowing development in one section of the land. A third alternative is partnering with the Forest Service to convert a large portion of your farmland to permanent vegetative cover while retaining the right to preserve your organic farm in one corner of the land. Combining these options can, in many instances, enhance both your personal enjoyment of your property and the economic advantages gained from ownership of your land.

16 Where to turn to for help planning Resources: Finding Help, Advice, and Funding Land Rich: Land Rich is a national network of individuals, organizations and resources established by Asset Builders of America to help cash-poor land owners derive greater economic value from their real-estate holdings. Land Rich is committed to assisting intergenerational land owners in executing their land-preservation and development visions in a holistic and collaborative manner. To this end, Land Rich is a leading partner in the Heirs Property Resource Center and is dedicated to helping heirs property families realize the full potential of their property. Telephone: (608) The Southern Coalition for Social Justice (SCSJ): SCSJ is a non-profit organization that assists landowners with limited resources who are seeking to preserve and protect their heirs property. In addition to their direct representation in heirs' property representation, SCSJ can explore land use options with families and businesses, assist them in designing structures to support different land use options, connect them to experts in the land use options being considered, and negotiate with local governments when zoning or the provision of public services such as water or sewer are an issue. Furthermore, SCSJ works to publicize challenges associated with heirs property and the potential solutions for families and businesses. Telephone: (919) Conservation Trust for North Carolina (CTNC): CTNC is a non-profit organization that preserves North Carolina s natural resources as a legacy for the people who love North Carolina now and for generations to come. CTNC and the state s 24 local land trusts assist landowners in planning and securing conservation agreements that perpetually preserve property while possibly providing tax benefits. Based on the conservation values of heirs property ecological, scenic, recreational, agricultural, cultural, or historic CTNC and the local land trusts work with landowners to assist in tailoring conservation plans and agreements best suited for the landowners short-term and long-term needs and goals. Additionally, CTNC assists in preserving heirs property by funding grants for transactions costs, lobbying in Raleigh and Washington, and coordinating education and outreach efforts. Telephone: (919) American Planning Association (APA): The APA is an independent, not-for-profit, educational organization that provides leadership in the urban-planning profession. The North Carolina Chapter of APA, as well as planners across the country, may be available to

17 provide pro bono services to families who want to better understand regulatory requirements that apply to their land, including zoning laws and state and federal environmental statutes. Volunteer planners can also assist families in developing a vision for a particular piece of land based on its unique characteristics and strategic advantages. Organizations that provide mediation services Dispute Resolution Institute at the North Carolina Central University School of Law: The mission of the Dispute Resolution Institute is to advance the theory and practice of dispute resolution in the pursuit of justice and reconciliation between individuals and groups in conflict. The Institute will be committed to ensuring that evolving methods for resolving conflict do not undermine justice for economically disadvantaged, minority and marginalized individuals and communities. Telephone: (919) Harvard Negotiation and Mediation Clinical Program (HNMCP): HNMCP connects Harvard Law School students with families that would benefit from strategic advice for ongoing or upcoming negotiations or disputes. These students, trained in both the theory and practice of dispute resolution, are prepared to exercise their new skills and knowledge on behalf of real-life clients. Organizations that assist small business owners The Land Loss Prevention Project (LLPP): LLPP provides assistance to all limited resource and financially distressed farmers and landowners who face legal issues regarding the use and the retention of their homes and land. LLPP has a business center that provides a variety of in-house services and resources to assist farmers and guide landowners interested in developing their land for agritourism, organic farming, or other similar business ventures. Through their SmartGrowth program, they provide consultation and legal assistance on business issues to farmers and people considering entering the farming profession. The program will offer advice on contracts, cooperatives, money management, and tax law. Telephone: (800) The North Carolina Community Extension Program: This program provides North Carolina residents with a wide variety of educational programs, publications, and events. Specifically, they have numerous programs designed to help small farmers, including programs that teach selecting and developing alternative enterprises; business management skills; direct marketing; productions practices to improve small-scale production of horticultural vegetables, flowers, and fruit; and principles and practices of sustainable agriculture.

18 Black Farmers and Agriculturalists (BFAA): BFAA is a non-profit organization created to respond to the issues and concerns of Black farmers in the U.S. and abroad. BFAA was also organized to monitor the U.S. Department of Agriculture and the historic 1999 Class Action Lawsuit Settlement Pigford v. Glickman, which was to award 20,000 Black farmers $2.5 billion in damages for loan discrimination practiced committed by the federal government. BFAA is committed to seeing that every Black farmer gets their award settlement and that the USDA stops its continuing practices of discrimination against Black farmers. Telephone: (252) The North Carolina Farm Transition Network (NCFTN): NCFTN partners with organizations and professionals toward the goal of keeping land in farm and forest production as it passes between generations or otherwise changes ownership. This organization provides resources to help facilitate family discussion and understanding of tools used in farm transfer. Not only do they offer print resources, but they also offer on-farm assistance at low- or no-cost to families looking for solutions. Telephone: (919) Concerned Citizens of Tillery (CCT): CCT seeks to promote and improve the social, economic, and educational welfare of the citizens of Tillery and the surrounding community area through the self-development of its members. CCT has focused on a variety of areas, including justice for Black farmers, health care, and environmental justice. Telephone: (252) The Small Business Administration (SBA): The SBA provides assistance to small businesses owned by socially and economically disadvantaged individuals through its Government Contracting Business Development program. Additionally, the SBA provides free counseling and technical assistance on starting, better operating, or expanding small business through Service Corps of Retired Executives (SCORE), Small Business & Technology Development Centers (SBTDCs), and Women s Business Centers (WBC). SCORE has sixteen regional offices through North Carolina and matches volunteer business-management counselors with clients in need of expert advice, with experts in nearly every business area. SBTDCs: Through fifteen regional offices in North Carolina, SBTDCs provide services such as development of business plans, manufacturing assistance, financial packaging assistance, contracting assistance, and international trade assistance, with a special emphasis on e-commerce, IRS, EPA, and OSHA regulatory compliance, research and development, and market research.

19 WBCs: Through the management and technical assistance provided by the WBCs, women entrepreneurs who are economically or socially disadvantaged, are offered comprehensive training and counseling on a vast array of topics to help them start and grow their own businesses. Minority Business Enterprise Center (MBEC): MBEC is a partnership program between the North Carolina Institute of Minority Economic Development and the US Minority Business Development Agency. It provides technical and financial assistance to existing and emerging minority businesses throughout North Carolina. Financial assistance includes financial, credit, and risk analysis; offering SBA and conventional loans; and finance counseling. Additionally, MBEC provides strategic advice and business planning, including advice on establishing the organization and structure of your small business. Telephone: (919) Community Development Corporations (CDCs): CDCs are local organizations designed to provide assistance for a wide array of projects that enhance economic and community development in low-income communities. This includes assistance in real estate development, particularly for the development of affordable housing. Additionally, CDCs provide assistance to small businesses through lending, technical assistance, and small business incubation. The North Carolina Community Development Initiative provides grant funding and other assistance for local CDCs and would be a useful resource to help you locate a CDC in your area. North Carolina Community College Small Business Centers: There are fifty-eight community colleges that provide training and make business research and reference information available. These small business centers offer workshops on How to Start a Business and How to Write a Business Plan. Many community colleges offer the REAL Entrepreneurship course, which offers a hands-on way to flesh out your business idea to see if it will work. North Carolina Department of Commerce: The Department of Commerce provides the Business ServiCenter, which offers one-on-one client consultations, customized licensing information, employer and business structure forms, and a Small Business Ombudsman to work on your behalf to resolve issues with state government agencies. Telephone: (800) Business.gov: Business.gov provides quick and easy access to business laws, government regulations, forms, and agency contacts. It also offers compliance guides that are unique to a variety of industries and business types.

20 Organizations that provide financing and financial advice for small businesses: Self Help: Self-Help is a community development financial institution that operates seven regional branches throughout North Carolina. Self-Help offers loans for small business development, including SBA guaranteed loans. Self-Help generally requires between ten and forty percent of the business assets to be paid for by owner investment and does require some collateral. Telephone: (800) The Small Business Administration (SBA): The SBA guarantees loans made by private lenders, which relieves some of the risk incurred by private lenders and encourages private lenders to offer loans to more start-up businesses. Loans vary in size, type, and term, but there are four primary sources of SBA funding: 7(a) Loan Program: These loans can be used to purchase machinery, equipment, fixtures, supplies, leasehold improvements, buildings, finance seasonal lines of credit, augment working capital, or refinance existing debt; The Certified Development Company or 504 Loan Program offers long-term, fixedrate, subordinate mortgage financing for acquisition and/or renovation of capital assets including land, buildings, and equipment; The MicroLoan Program provides small loans ranging from under $500 to $35,000 that can be used for typical business purposes such as working capital, machinery and equipment, inventory, and leasehold improvements; and The Small Business Investment Program provides funding through Small Business Investment Companies, which are privately owned investment firms that fill the gap between the availability of venture capital and the needs of small business by using their own funds to make capital available through investments or loans. Organization that assists cooperatives Federation of Southern Cooperatives: The Federation of Southern Cooperatives assists in the development of cooperatives and credit unions as a collective strategy to create economic self-sufficiency. It engages in education and outreach strategies with the primary objectives of promoting retention of African-American-owned land and the use of cooperatives for land-based economic development. Telephone: (404)

21 Organizations that specialize in conservation easements and donations made to conservation trusts Black Family Land Trust (BFLT): BFLT seeks to ensure, protect, and preserve the natural, historic, environmental, and community resources of African Americans through land ownership. BFLT enforces conservation easements, even after you no longer hold title to the property, in order to protect critical land and other natural resources and preserve historically significant lands and communities for African Americans. BFLT also serves as an education resource to help you learn more about conservation easements. Telephone: (919) Conservation Trust of North Carolina (CTNC): CTNC works with the twenty-four local land trusts in the state to protect North Carolina s land and water through direct conservation and cooperative work. Through the clean water management trust fund, CTNC makes grants to local governments, state agencies, conservation non-profits, and land trusts to purchase, monitor, and enforce conservation easements on targeted properties that protect important watersheds across the state. Additionally, although the state has not in recent years funded the program, CTNC seeks to protect productive farmland from urban sprawl through the Farmland Preservation Project, which issues grants to local land trusts, local governments, and non-profit agencies for the purpose of purchasing conservation easements and monitoring and enforcing the terms of those easements. Finally, CTNC works in partnership with Community Development Corporations to promote conservation-based affordable housing, where a certain portion of a parcel of land is developed while the rest of the land is preserved through conservation easements. Telephone: (919)

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