Matthew Rydzfski thought he was running a small business until he tried to get a small business loan.

That’s when he found out that the Greenville company he and Wade Hawkins started in 2006, PremierePC, is a microbusiness. That made it much harder to get a loan, he said.

“You go to the bank and say, ‘Hey, I’d like a loan and this is my idea.’ They laugh at you,” said Rydzfski, who has four employees. “Unless you’re well funded already, as in you have personal net worth, you can’t get a loan.”

Gregg White, deputy director of the South Carolina District of the Small Business Administration, noted a deficit in microbusiness lenders across the state.

Now, a new state law, the Microenterprise Development Act, is trying to change that, and provide a boost to the economy.

The law, led by by Rep. Kenneth Hodges, D-Colleton, and signed by Gov. Nikki Haley in late May, directs the South Carolina Department of Commerce to establish a program that provides loans and grants for businesses that require $25,000 or less in startup capital and have five or fewer employees.

Helping such enterprises is important, Hodges said, because they are the backbone of any state’s economy. Furthermore, he said, self-employment is a viable alternative to unemployment.

A study by Washington, D.C.-based Association for Economic Opportunity found that 87 percent of all businesses in South Carolina are microbusinesses. That mirrors the national picture, and the association concluded that if one in three microbusinesses hired one additional employee, the U.S. would be at full employment.

“What we need to do is make people realize that it is a vital part of the South Carolina economy and we need to rally around them and encourage them,” Hodges said.

Rydzfski wonders why the state didn’t act sooner. “Any attention that can be brought to the absolute lack of attention that has existed ... can only benefit any of us,” he said.

Often, the priority has been attracting the big companies that can provide hundreds of jobs, said Deborah McKetty, president and CEO of the Greenville-based nonprofit CommunityWorks Carolina, which provides financing and specialized training for startup and existing businesses in the Upstate, including microbusiness loans.

“The focus hasn’t been on how do we grow the local businesses from within,” she said.

McKetty said for some in the unskilled labor market, self-employment through microbusinesses is “probably going to be one of the best hopes we have of really getting our folks employed.”

Hodges said the Microenterprise Development Act has been four years in the making. It’s a case where a committee was assigned to do a study, and the committee produced results. One was that microbusinesses are now included in the Commerce Department’s economic development strategy.

“That’s the intent of that bill,” he said.

The potential impact can be seen in the successes of people who have secured microbusiness loans from CommunityWorks.

Jayvn Taylor, 29, of Travelers Rest, wanted to be her own boss and do something she’s passionate about. So she soon will begin operating her Swamp Rabbit Smoothies food truck.

The idea for the food truck came as she would run or walk on the Greenville Hospital System Swamp Rabbit Trail in Travelers Rest.

The heat stirred her craving for a smoothie. Her first thought was someone should come up with the idea for a smoothie food truck. Then she thought, “Why can’t it be me?”

Her uncle, who started downtown Greenville’s Coffee Underground with a coffee cart before opening a storefront with a partner, advised her to be mobile and start small.

Taylor started her process toward entrepreneurship with help from the Clemson Regional Small Business Development Center. Her parents bought her the cart for Christmas.

A CommunityWorks microbusiness loan provided funding for equipment, including a refrigerator, blenders and a sliding-door freezer.

Tiffany Robinson went through the microbusiness lender program, also at CommunityWorks, to open her Anderson shop, A Night Out, which consigns bridal and formal wear.

Robinson said she was seeking something to do when she retires from the U.S. Postal Service, where she has worked for the past 25 years.

“I thought about it for a while, did some research and just decided why not go for it,” she said.

Like Taylor, Robinson said the hardest part of the process was finding financing.

“I was kind of at a loss for a while because when you go to most financial institutions they’re like, ‘how long have you been a business owner?’ Without a business track record, they really don’t want to give you any money,” she said.

CommunityWorks has closed 26 loans totaling over $255,000 to help startup businesses open their doors and existing businesses expand their operations. The businesses are in Anderson, Greenwood, Greenville, and Spartanburg counties, according to the organization.

The agency has eight businesses in the pipeline including a food truck, a home health care center, an exercise gym and an electrical contracting business.

Rydzfski and Hawkins both worked in information technology before deciding to open PremierePC, an outsource technical company.

Starting in 2006, the year before the economy started to slip into recession, set them up for years of financial struggles.

“It was pretty bad. We started with the money in our pockets so there wasn’t a lot of capital. There was no cushion to fall on,” Rydzfski said.

“We had no net worth,” he said, but since all they needed was money, “I thought going to a bank would be an appropriate place to go ... What you end up with is personal credit cards that you use.”

Only one bank in town was willing to give them a line of credit before the economy tanked, he said. The line of credit was maxed out in 18 months.

But because of a low-interest microbusiness loan from CommunityWorks, “We’re actually now, today, in the best fiscal situation we’ve ever been. Period.”

UPSTATE MICROBUSINESS NUMBERS

ANDERSON COUNTY

Total businesses: 14,748

Total microbusinesses: 12,999

Percentage of businesses that are microbusinesses: 88.14

GREENVILLE COUNTY

Total businesses: 42,651

Total microbusinesses: 36,713

Percentage of businesses that are microbusinesses: 86.08

LAURENS COUNTY

Total businesses: 3,966

Total microbusinesses: 3,535

Percentage of businesses that are microbusinesses: 89.13

SPARTANBURG COUNTY

Totaal businesses: 22,805

Total microbusinesses: 19,576

Percentage of businesses that are microbusinesses: 85.84

SOURCE: Association for Enterprise Opportunity, from census data