Owning a small business is challenging and accessing capital is often one of the biggest hurdles. For many small and micro businesses, Community Development Financial Institutions (CDFIs) might be one solution.
CDFIs are organizations that specialize in providing financing to businesses that may not otherwise have access to capital from traditional lending sources, such as banks and credit unions.
Some of these businesses have been operating less than three years, some may have a credit hiccup, or some are ready to start a new business. CDFIs can be banks, credit unions, loan funds (most of which are nonprofit), and venture capital funds.
During the pandemic, BBB El Paso connected small businesses to available local, state, and federal resources at EPBusinessStong.org. Two of the nonprofits that were designated by the City of El Paso and El Paso County to facilitate the distribution of small business grants and loans were LiftFund and People Fund, both CDFIs.
Both these organizations continue to serve small businesses with competitive loan opportunities from funding they raise through municipalities, financial institutions, and/or philanthropists. They also provide individual consultation services and technical assistance, as well as educational events and resources to help small business owners learn to navigate the many hurdles they face as they start and grow their businesses. For instance, they will work with you to find a loan or grant that makes the most sense for you and your business. They also offer financial education classes and networking and mentorship opportunities.
Of special note, the City of El Paso and LiftFund have recently partnered to create the Dream Makers Fund, a revolving loan fund for small businesses in the City of El Paso. The fund provides loans for business expenses, including payroll, equipment, inventory, and other expenses, at rates as low as 6 percent. As the money gets paid back, the money is then freed up for other small business owners.
If you are thinking of starting a business or want to grow your small business, but you do not have the capital, credit history, or banking relationship for a traditional commercial loan, you should look to our local CDFIs to learn about the opportunities they may provide.
The Better Business Bureau created EPBusinessStrong.org so that business owners and workers could access resources like LiftFund and People Fund in one easy place. Working together, we can move the El Paso economy forward.
Marybeth Stevens is CEO of the Better Business Bureau of El Paso. You can reach her at [email protected].