Community development: Small businesses get access to loans

November, 2016 Posted in Business

By Mary Owen

Looking for a small business loan?

Community LendingWorks received $500,000 from the U.S. Department of Treasury’s Community Development Financial Institution Fund, enabling the organization to increase lending and investment activity in low-income and economically distressed communities across Oregon.

“This funding goes straight towards providing access to capital for businesses in the Santiam Canyon,” said Maia Hardy, community and business outreach coordinator for CLW. “As a nonprofit loan fund, the money that we received will go straight to grow our loan fund, and in turn enable us to fund more businesses and people across Oregon.”

Hardy said the loans provided by CLW, the only CDFI loan funding in Linn County, can be up to $50,000 for a business application.

“Community LendingWorks provides not only access to capital but financial and business development services,” Hardy said. “Our loans are general paired with technical assistance for each applicant and borrower. We provide assistance with business planning, and in general helping a business get ‘loan ready.’”

Community Development Financial Institutions, certified by the U.S. Department of Treasury, play an important role in generating economic growth and opportunity in Oregon’s most underserved communities, according to CLW.

“These loans are not technically ‘low interest,’” Hardy said. “As a CDFI, we fund businesses and individuals that have a hard time accessing capital through a traditional bank or credit union. This could be because of past credit challenge, a loan amount that is too small, or because they are a startup business without the history for the bank to go off of. CLW was created to fill that gap. Given that we provide access to capital for more risky borrowers, our loan interest rates are pretty competitive.”

The loans, she said, are generally secured with collateral.

“There are rare instances where unsecured loans are approved, but these loans are generally smaller dollar amounts,” she said. “Loan terms vary depending on the amount, and the type of loan. The pay-back system is pretty standard.”

CLW takes check, cash or money order or automatic payments from a checking account, Hardy said.

“Because we are a nonprofit, we have different loan policies that allow us to be flexible in repayment,” she added. “We have the ability to match payments with cash flow. For example, a tourism based business that makes most of their money in the summer – we can take higher payments during their busy months, and lower payments during their slower months.”

Since its inception in late 2011, CLW has loaned more than $3 million to individuals and businesses that face barriers to obtaining capital through traditional lending institutions.

“We are incredibly grateful and ecstatic about the grant funds from the CDR fund,” said Lynn Meyer, CLW’s director. “The impact of these funds is almost immeasurable, as providing funding to small and micro businesses has created and retained over 300 jobs in the last five years.”

Community LendingWorks is one of only two CDFIs in Oregon to receive grant money in this funding cycle, and will now be able to use these federal funds to help Oregon residents and businesses to prosper, according to its press information.

“If you know of anyone that could utilize our programs, please send them our way,” Hardy said

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