NALCAB, LiftFund and Wells Fargo Announce Launch of Largest National Loan Fund for the Growth of Latino-Owned Small Businesses
The Wells Fargo Foundation has made a historic $10 million grant to NALCAB — National Association for Latino Community Asset Builders — to support growth-oriented lending to minority-owned businesses nationwide through a network of Latino-led nonprofit business lenders. The new Acceso Loan Fund is designed to help diverse entrepreneurs scale to a greater size — expanding their revenue, impact on the economy and ability to provide jobs.
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A $10 million grant from the Wells Fargo Foundation is establishing a new national loan fund with the National Association for Latino Community Asset Builders and its network partners to spark Latino small business growth. (Photo: Business Wire)
By sharing the grant funds equally, NALCAB, LiftFund and each of ten other CDFI (Community Development Financial Institutions) partners in the NALCAB network will be co-owners of the fund. The Acceso Loan Fund will provide small business loans in the range of $50,000–$500,000.
“The CDFI sector offers few, if any, truly national strategies for deploying capital to the large, fast-growing Latino small business market,” said Noel Poyo, executive director of NALCAB. “No single NALCAB Network lender could have presented this powerful value proposition alone, but collectively, this is the most credible and scalable national investment opportunity available to grant makers and capital providers seeking to invest in Latino small business growth.”
The U.S. Latino Entrepreneurship Gap Report published by the Stanford Graduate School of Business’ State of Latino Entrepreneurship Initiative identifies scaling, not start up, as the primary challenge for Latino-owned businesses. It states, “Latinos make up 17% of the U.S. population, and 24% of all new entrepreneurs. … Latinos are actually overrepresented among startups. However, these new business starts … are not scaling at high rates. Latinos make up only … 5% of employer businesses with more than $1 million in annual revenue.”1
The fund will engage in two related lines of business:
1) Lending directly to small businesses that have been referred by members of the NALCAB Network that provide small business development services, targeting an average loan size of $160,000.
2) Purchasing portfolios of small business loans, of similar size and character, from NALCAB Network lenders.
“Small business growth requires greater collaboration and innovation when it comes to access to capital,” said Brandee McHale, president of the Wells Fargo Foundation. “NALCAB and its partners have created a first-of-its-kind loan fund that truly establishes a national network of lenders looking to help smaller companies grow to the next level. We hope that our grant inspires others to join the fund and shows entrepreneurs that we believe in them and their growth potential.”