Facilitating Access to Capital and Economic Development through Affinity Group Lending

Facilitating Access to Capital and Economic Development through Affinity Group Lending Sonia Smith Economic Development/Lender Relations/Public Information Specialist Small Business Administration (SBA) Jill C. Fink Executive Director The Merchants Fund HEATHER HANOWITZ VICE PRESIDENT & SENIOR LOAN OFFICER PICDC PANEL MODERATOR Steve Kuzmicki Economic Development Project Manager Southwest CDC Kersy Azocar Sr. VP of Microlending FINANTA

FINANTA OUR MISSION: Founded in 1996, FINANTA is a mission-driven nonprofit lending institution facilitating access to capital and consultation services to entrepreneurs, first-time homebuyers, and consumers. We accomplish our mission by lowering the barriers that keep people from accessing the capital to build assets and evolve financially.

Programs Affinity Group Lending Individual Lending Business, Consumer, First-Time Homebuyer Individual Lending Technical Assistance Financial Counseling and Coaching, Credit Builder Loans Community Development Financing Mission driven real estate development

What Problem do we solve? In the United States, more than 26 million households and families are excluded from Traditional Banking FOCUS On ECONOMIC EMPOWERMENT Reasons why Buss Fail: 82% pf Businesses fail due to cash flow problems (Source: FUNDERA) 76% Marketing Challenges 43% don’t have the right product 23% don’t have the right team

Our Solution: Create a Pathway for Capital Access FOCUS On ECONOMIC EMPOWERMENT Desarrollo economico

TRADITIONAL ROSCA OR LENDING CIRCLES Short for ROtating Savings & Credit Association People in an Affinity Group, or Peer Lending Circle use their own money to lend it to each other in a rotating basis. It does not build credit or provides access to a financial entity.

Affinity Group Lending: OUR APPROACH 1. Receive a 12-Month individual Loan 2. Build an Individual Financial Action Plan (FAP). 3. Build financial skills –Monthly workshops and 1-on-1 Meetings. 4. Complete loan repayment by the end of the cycle. 5. Groups may participate in additional cycles Starting at $1,200 or $3,600 12 month / 9% fixed loan Build capacity to access up to $25,000 / 24 month in in several borrowing cycles Clients can graduate to up to $250,000 loans Groups of Up to 15 individuals

Ella Emprende

Averaging 240 hrs of entrepreneurial capacity building by cycle 5 CREDIT BUILDING & T.A. Client-Centered Financial Action Plan (FAP) Increase knowledge of credit Build, manage, and increase a credit score Build financial capacity to access capital Averaging 240 hrs of entrepreneurial capacity building by cycle 5 Up to 30hrs of TA preparing to borrow

PARTNERSHIPS & COLLABORATIONS

Small Business Administration (SBA) Sonia Smith Economic Development/Lender Relations/Public Information Specialist Small Business Administration

The Merchants Fund Jill C. Fink Executive Director The Merchants Fund

Southwest CDC Steve Kuzmicki Economic Development Project Manager

CONNECT with us! Facebook: https://www.facebook.com/Finanta.org Twitter: https://twitter.com/finanta_ LinkedIn: https://www.linkedin.com/company/finanta/