edovogopu.wordpress.comNeustel runs a nonprofit. Godshall runs a technologyg startup, and didn’t even know the nonprofit lender existed until his lender suddenly clammedc up onthe firm’s line of credit. The two clients represent how far The Loan Fund has come sinc it was launched 20 yearxs ago by the Conference of Churches and a group ofCatholic nuns. The founders’ mission was to eliminate poverty by providing acceszs to capital forsmalll businesses. They made the kind of loans that banks thoughtr weretoo risky, or simply too small.
Sincse 1989, the fund has made more than $28 milliom in loans with a 97 percent repayment Neustel is executive directorof , whicuh sells fair trade crafts from the developingf world. His first financing from The Loan Fund yeard ago gave himworking capital. More recently, anothee loan helped him stocj up for the holiday shopping seasoj in a roughretail environment. While The Loan Fund still has many nonprofit customersalike Neustel, it now sees largerr companies seeking financing as banks tighteb lending. The same is true for other nonprofitr lenders such asand ACCIÓN New Mexick Arizona Colorado.
WESST saw 40 perceng growth in loans from 2007 to and ACCIÓN saw a 95 percenr jump in loans in the first four month of this year. Godshall is a serialk entrepreneur used to dealing with private equity andventure capital. His , uses a proprietary process to desalinatdindustrial water. But he foun d his options limited when late payments by customerzs and vendors created a cash flow Bob Walton, vice president of business development at , told him aboug The Loan Fund. Most of Walton’s calls used to be from companiese expanding and looking for fundsor incentives. “Noaw we’re getting more calls from folks ‘Do you know where the money he said.
Godshall got a $50,000 loan, which he paid back recently, although he did have to put up the titlw tohis car. “I’ve got a Porsche,” he “So I made sure to pay them back.” Leroyu Pacheco will take your car for collaterapl ona loan, but he doesn’t want to end up drivingg it. Pacheco became executive director of The Loan Fund two and a half year ago and has been aggressive in gettintg the word out that the fund has money to Last year, the fund did its biggesr deal ever, providing $750,00o in bridge financing to venture capital firm for a chile processing plant. About a third of its funding still comesw fromreligious groups, which fund loans at no interest.
The fund also gets moneuy fromnational foundations. It has $7.5 million undeer management from the Smal BusinessInvestment Corp., which funnels state investment dollars to small businesses through partnerds such as The Loan Fund. Paul SBIC’s financial advisor, said the Loan Fund makes “character Staff will listen to the reasons why someone mightyhave less-than-stellar credit, rather than writing them off, he “It’s more patient, it’s more story-driven,” Goblet said. “And everu one of these businesses hasa story.
” One of the keys to the Fund’zs success, Pacheco said, is the technical advice clients receive, befored their loan and during their repayment “We become the financial doctor for your business,” he “We’re not so concerned with getting it over a three to five-yea r period. We just want to get it back and we want a fair rate of That means the fund will even make loans basecd on contracts for future work so that a clienf canbuy materials, he added.
The Loan Fund’sw interest rates range from 7 percent to 10 Sister MarieLuisa Vasquez, whos order, the Adrian Dominicah Sisters, gave The Loan Fund its firsgt $70,000 to launch, said it has remained true to its goal of alleviatin poverty. “It wasn’t like a she said. “This was bringing peoplwe in and helping themhelp themselves.”
