Hi Steve, great question. We often refer to what we're building as community-connected capital. Our approach to reaching & supporting underserved populations is 3-fold: 1. Outreach/Presence, 2. Referrals 3. Impact Framework
1. Outreach/Presence: Our team is out at community events, collaborative efforts, workgroups, and meetings getting to know the tenacious folks on the ground making their neighborhoods stronger and seeing how we can help them or businesses & nonprofits that they know with flexible capital. By being present, we develop trusting relationships with practitioners and stakeholders who often connect prospective borrowers to us. As Director of Community Engagement, I spend about half my time meeting with people and engaged in local systems change initiatives focused on elevating our most vulnerable populations. Everyone on our team does similar work to varying degrees, leveraging their own personal networks in public health, New Americans/immigrants/refugees, food systems, and broad local philanthropy to identify opportunities to make an outsized community impact with our flexible financing.
2. Referrals: In addition, several local and regional banks refer clients to us who don't quite meet their stricter underwriting standards, typically asset/collateral-based and/or hingeing on personal credit score & personal guarantees, but that they want to see succeed in supporting underserved populations. Community partnerships that we develop through our outreach also generate a substantial number of referrals to us. These organizations often haven't had access to capacity-building resources due to systemic inequity, so we provide free consulting on their impact, management, and financial practices to even the playing field and help them succeed as strong investments. We don't use personal credit scores in our commercial underwriting as we believe that further disadvantages underserved populations from participating in business ownership or growth. We have other strategies in place for risk mitigation, like our hands-on underwriting & technical assistance coaching, and gating structures for multiple loan disbursements based on meeting agreed upon milestones.
3. Impact Framework: Finally, our impact framework centers on economic opportunity -- reducing or removing barriers to access for underserved populations. We go beyond just looking at the demographics of business owners to the end impacts they make as employers, educators, and community members helping everyone in our community to realize their full potential. We know that community-level change is complex and so support interrelated efforts in early childhood development/access to childcare, formative education, skills training & workforce development, quality jobs, local market systems, and inclusive infrastructure & affordable housing -- but always asking 'for whom are these impacts being generated?' All our investments must be removing barriers or creating new opportunities for underserved populations.
That was a mouthful/screenful, but hopefully helps flesh out the picture!