Another source for business loans
Since the financial meltdown of 2008, bankers have endeavored to serve the borrowing needs of their entrepreneurial customers. But laws such as Dodd-Frank — meant to regulate large banks and curb excessive risk-taking — put an overall squeeze on access to capital, especially for those with business startup dreams and little credit history.
Banks now have money to lend, but many entrepreneurs don’t fit a typical bank’s customer profile. Startups often lack a track record of business success and the collateral necessary to secure a traditional bank loan. But savvy community bankers don’t turn away business customers whose borrowing needs can’t be met internally.
Instead, they refer businesses to New Mexico’s nonprofit lenders, the Community Development Financial Institutions that lend money and provide other critical services that can help a business grow. The Loan Fund is one of those lenders, but it’s more than that.
At no cost to clients, it offers each year more than 4,000 hours of financial counseling and business development and support services that help potential borrowers get a loan and existing clients thrive. The Loan Fund invests in hardworking, underserved individuals and nonprofits that want to improve economic and social circumstances and the well-being of their communities.
Loan officers consider borrowers’ character, relevant experience and collateral, and the real or potential cash flow of the business. Because The Loan Fund is not regulated in the same manner as banks or credit unions, its loan officers have greater flexibility in loan decisions. Many of The Loan Fund’s loans come to fruition because of the loan officer’s ability to carefully adapt the terms of the loan to the borrower’s financial situation.
Since its start 29 years ago, The Loan Fund has issued more than $76 million in affordable loans that have enabled small businesses and nonprofits to create or preserve more than 9,000 jobs in New Mexico. For more information about The Loan Fund, visit www.loanfund.org.
Finance New Mexico connects individuals and businesses with skills and funding resources for their business or idea. To learn more, go to www. FinanceNewMexico.org.