With a mission of building bridges between resources and low- to moderate-income communities to improve the quality of life, the Finance Fund has been helping communities and business across Ohio for nearly three decades.
The statewide non-profit intermediary connects communities in need with private and public sources of capital for initiatives like development grants and new markets tax credits. And, since 2006, the Finance Fund Capital Corporation (FCAP), a certified Community Development Financial Institution, has been providing flexible loans to non-profits and for-profit businesses.
In an age where banks are extremely risk-averse when it comes to small business loans, “There is definitely a need for organizations such us and others to step in and fill those gaps,” says Finance Fund President & CEO Diana Turoff.
FCAP provides a financing alternative that has the ability to be more flexible than a bank, but actually works very closely with such institutions to help find businesses that need capital.
“Often times [banks] will call us to refer a project to say, ‘We really like this project but we just couldn’t get it approved,’ or ‘We can only do ‘X’ amount because there’s not enough collateral and will Finance Fund come in second position?'” Turoff says.
Finance Fund works with the bank and the business to round out the needed funding.
“Our mission is to leverage capital, bring more resources to these areas that need the most help,” says Finance Fund Lending Officer Omar El Hag Musa.
Whether its a referral from a bank or a word-of-mouth connection from a client, the Finance Fund weighs in factors banks don’t consider, like is the business in a low- to moderate-income area, will it employ low-income individuals, and what kind of community impact it will have.
FCAP’s Small Business Loan Fund has brokered deals with established businesses to startups. Loans can be used for any number of business needs – machinery, equipment, working capital, inventory, real estate, renovations, new builds, etc. – and generally range from $200,000 – $400,000.
In addition to its fund, FCAP is one of four in-state providers of SBA Community Advantage Loans. The loans are earmarked for small businesses and entrepreneurs in underserved communities that promote economic growth and job creation and max out at $250,000.
Resources on the Finance Fund website provide videos and additional information to help businesses determine if the FCAP programs might be a good fit, and prepare them to approach the organization.
If a business doesn’t align with loan criteria, the Finance Fund directs organizations to the necessary resources to take the next steps.
“Here are the things you need to work on, and here are the people you need to talk to,” El Hag Musa says. “We have a large network of supportive organizations that we work with as well.”
The Finance Fund works with other CDFIs, like ECDI, as well as SCORE, SBA and the Central Ohio Minority Business Association.
Its connection and resources are another differentiator between the Finance Fund and banks. Banks just have capital, but “We’re pulling from a lot of different sources,” Turoff says.
In addition to its Small Business Loan Fund and connections to resources, the Finance Fund launched its Healthy Food for Ohio initiative in March of 2016. The public-private partnership provides loans and grants to food purveyors developing or renovating fresh-food retail in underserved communities.
“It’s amazing how many areas do not have access to fresh produce,” Turoff says.
“The private market has failed in providing that resource for these communities, especially in communities in food deserts, and we’re trying to give a leg up to proprietors that are trying very hard to keep their stores open or open up stores in those communities,” El Hag Musa says.
Retail grocery stores are challenging in general and come with a lower profit margin that leaves little to no room for mistakes.
“So what we are trying to do with this program is alleviate those risks with subsidies,” El Hag Musa says.
The Finance Fund will structure packages with loans, forgivable loans and grants for each Healthy Food for Ohio project based on its needs. Grocery chains, individual grocery stores, neighborhood food stores, co-ops, farmers markets and other fresh-food projects are eligible to apply.
The Finance Fund says there has already been much interest in the program, and is continuing to look for proprietors to expand its reach.
Communities across the state are feeling the Finance Fund’s impact. The organization and its affiliates have invested $336.2 million in housing, economic development and community facility projects leveraging $1.37 billion. Of that, over $73 million has been invested in 239 projects in Franklin County.
FCAP made its first loan in 2006, but has been investing more heavily over the last three years, to the tune of $23.6 million in 47 businesses. Just over 40 percent of those loans have gone to minority- or women-owned businesses. Another $2.6 million has been brokered through 13 SBA Community Advantage loans.
For more information, visit financefund.org.
