$100K investment to help Southern Arizona entrepreneurs of color

Thank you, Growth Partners Arizona for your %100,000 investment in the BIPOC Community Managed Loan Fund
Thank you, Growth Partners Arizona for your %100,000 investment in the BIPOC Community Managed Loan Fund

A $100,000 investment has been made to support at least 10 Southern Arizona small business entrepreneurs who are Black, Indigenous or people of color.

The investment from the Tucson-based Growth Partners Arizona will be available through the Community Investment Corporation’s BIPOC Community Managed Loan Fund.

The no-interest microloans of up to $10,000 are awarded under a character-based lending model, in which a borrower’s personal qualities, community reputation and other factors that go beyond credit scores and collateral are given greater emphasis, a news release said.

The loan fund is two years old, and its volunteer committee of community leaders has the decision-making authority for the loan funding, defining the application process and the criteria used.

Obstacles to capital access for communities of color include distrust of traditional financial institutions, overly complicated application processes, and banking’s over-reliance on collateral and credit scores to make loan approval determinations, the committee found.

Instead, a low-barrier application allows business owners to apply via video, audio or in writing. Only after being approved for a loan are entrepreneurs required to provide financial and business documentation, the news release said.

Over the past two years, the committee has approved more than 50 no-interest microloans in Southern Arizona, totaling nearly $400,000 in funding.

“I think some traditional lenders might be skeptical of our underwriting process,” said CIC Executive Director Danny Knee, “but the performance of our loan portfolio shows that we are on to something with our trust-based approach.”

Growth Partners Arizona, a Community Development Financial Institution, is planning to expand the fund’s community-managed approach statewide, the news release said.

“Investing in the fund is not only important to the community but resonates with me personally,” said Growth Partners Arizona CEO Andre Whittington. “I have witnessed family members and friends lose their businesses due to limited or nonexistent funding opportunities. Through this partnership we are providing real solutions and establishing inclusive financial pathways for BIPOC business owners to secure the capital needed to scale their businesses.”

For more information about the BIPOC Community Managed Loan Fund, visit tucne.ws/1kzm. 

Read the original article on Tucson.com.

Funds Available for Small Businesses to Go ‘Green’

by Kimber Lanning, Andre Whittington, and Danny Knee

As our country prepares to spend billions of dollars in new funding on environmental efforts, America is sitting on a gold mine in the fight against climate change, and we need to do something about it.

The opportunity lies with small businesses.

Many small-business owners want to be more environmentally friendly — and all are interested in saving money. Implementing simple changes like LED lights to large projects like installing solar panels can make a big difference to both our planet and businesses’ bottom lines.

The size of the opportunity is huge.

In Arizona, nearly 600,000 companies have fewer than 20 employees; nationwide, it’s more than 26 million. That’s 98% of all U.S. firms.

Barriers to Small Businesses Going ‘Green’

But small-business owners are stretched thin.

They often juggle everything from marketing to purchasing to accounting, duties that corporations have whole teams to handle. Adding “Chief Sustainability Officer” to a small-business owner’s “to-do” list can seem daunting.

Another challenge is the capital to carry out “green” projects.

Rarely do small businesses have a few hundred or thousand dollars to spare for sustainability upgrades, even when the investment will save them as much or more money in the long run.

The new environmental tax incentives offered by the Inflation Reduction Act alone may recover the cost of some projects.

And yet, big banks will laugh a small business out the door for seeking a modest loan “just” to conserve water and energy or require burdensome hoops for the business to jump through.

Boot Camp Helps Businesses Create Plan to Save

Thankfully, there is a solution.

Local First Arizona’s Green Business Boot Camp has helped hundreds of local business owners cut their water, energy, waste and transportation usage by 20% or more with simple adjustments, often leading to thousands of dollars in savings.

For example, Green Business Boot Camp graduate Pines Inn & Suites in Cottonwood is installing motion-sensor thermostats to keep air-conditioning costs down when rooms are vacant.

Phoenix restaurant Duck & Decanter is conserving major amounts of water by putting in low-flow toilets and upgraded kitchen equipment.

And Tucson dessert shop Frozen Delight has turned to recyclable packaging.

Photo credit: Kylee Musslewhite with permission from Frozen Delight

Affordable Loans to Finance the ‘Green’ Transition

In addition to education and support from the boot camp, our Green Business Micro-Loans provide the financial runway for small businesses to afford these changes.

With these loans, boot camp graduates in six Arizona counties can get help paying for sustainability improvements at low-interest rates through a short application process.

In Maricopa and Yavapai counties, the newly launched Green Loan Fund, made possible by Growth Partners Arizona and Vitalyst Health Foundation, provides loans to eligible local businesses up to $10,000 at 3% interest, which businesses pay back entirely with savings generated by their sustainability projects, so their cash flow is uninterrupted.

In Pima County, the Green Community Fund, created in partnership with Community Investment Corporation, provides up to $15,000 at 0–5% interest.

And in Graham, Greenlee and Cochise counties, small businesses can receive loans up to $25,000 at 7% interest through Community Investment Corporation for “green” as well as other projects.

More Funding Needed for Small Businesses to Meet Climate Goals

One of the best things about these micro-loans is how easy they are to obtain.

Whereas traditional banks may require years of financial statements, credit scores and collateral to extend credit, these funds rely on “character-based” lending.

A free energy and water audit conducted by Local First plus an explanation of how the money will be used, the anticipated savings and the local business’ support in the community is all that is asked.

Kevin Ticer, owner of Custom Upholstery Services in Safford, said applying was a snap. “It was easy to go through the micro-loan process,” he said. “After a couple of meetings with the loan committee, I was approved and able to invest in the equipment and remodeling that I needed.”

But loan programs like these need more funding to fully power the shifts small businesses must make in the coming years.

If we don’t invest to help local entrepreneurs become more sustainable, it will cost us all eventually.

Recognizing the motherlode that small businesses hold to achieve progress toward climate goals is the first step for our society. Obtaining more funding — whether from government, private foundations or donors — is our next responsibility.

Kimber Lanning is the CEO of Local First Arizona. Andre Whittington is the executive director of Growth Partners Arizona. Danny Knee is the executive director of Community Investment Corporation.

How a zero-interest loan helped a Black organic farmer put down roots in southern Arizona

Desert Sky Produce in southern Arizona Courtesy of Local First Arizona

When John Benedict drove from Philadelphia to rural southern Arizona five years ago in a van he bought for $1,000 with money saved from eBay sales, he had no intention of becoming a farmer. 

He just knew he wanted to leave city life, and an unfulfilling career in finance, behind.

“I just knew I wanted freedom,” Benedict, 33, said. “I just wanted land and space.”

With the help of the thriving, local agricultural community in Cochise County, Benedict has become the farmer he never thought he’d be, cultivating organic beets, carrots, strawberries, onions, broccoli, cabbage, salad greens, squash, cucumbers, tomatoes and more.

And with the help of a novel funding vehicle from Community Investment Corporation, Benedict’s farm, Desert Sky Produce, has been able to grow, turn a profit and inspire him to think bigger.

Community Investment Corporation, a non-profit financial-empowerment organization, is part of Local First Arizona’s AZNavigator, a statewide small-business and entrepreneurship-assistance center. The 10 organizations that comprise AZNavigator provide no-cost assistance to startups and local business owners in Arizona.

“When I moved out here, I was living in a van. It was cold and miserable,” Benedict said, noting he is now organizing a co-op of other small-scale growers. “Without Community Investment Corporation’s funding, this would not even have been remotely possible.”

Simple Conversations Lead To Life-Changing Results

The farming and the funding came together in the most happenstance of ways, beginning with simple conversations. 

On a visit to a local food bank, a local farmer invited Benedict to earn money by helping seed his land. Benedict accepted, and it changed the trajectory of his life.

Organic farmer John Benedict Courtesy of Local First Arizona
Strawberries grown by Desert Sky Produce Courtesy of Local First Arizona

“I never stopped farming, from that moment on,” he said. “It felt like this is exactly what I’m supposed to be doing.” 

With that anchor in place, Benedict learned while working, made the most of whatever funds came his way — investing in solar panels, water tanks and pumps — and continued creating connections within his rural community.

‘The World Should Be More Economically Available To Everybody’​

Another of Benedict’s connections at the food bank quite literally paid off.

A woman there directed him to Community Investment Corporation, where he learned about a loan fund for entrepreneurs of color that could help him expand his farm.

As a Black farmer with no capital to use as collateral, Benedict embodied the reason the loan fund was created.

Less than 2% of farmers nationwide are African-American, and studies show Black and minority farmers on average receive less access to credit than white farmers.

Brandi Szymanski, the corporations’s rural lending manager, said the fund was created in the wake of the Black Lives Matter movement to provide financial opportunities to all kinds of entrepreneurs from underserved communities.

“The world should be more economically available to everybody,” Szymaski said.

Brandi Szymanski Rural Lending Manager

Creative Approaches To Community Funding​

Carrots grown by Desert Sky Produce Courtesy of Local First Arizona

To receive a zero-interest loan up to $10,000 from Community Investment Corporation, applicants are asked to shoot a video of the work they’re doing and what they hope to accomplish with financial support.

Benedict appreciated the creative approach to the funding application because it meant he wouldn’t be dismissed for not coming to the table with years of financial records. 

“I did my application in my field,” he said. “I literally showed them my field of garlic and onions. It felt amazing showing them that I already had the seeds going.”

Paying it forward to the next small business

With the funding in place, Benedict has started a Community Supported Agriculture (CSA) initiative to serve a local rehab facility, plans to open a retail space and is partnering with local schools. All of the work is allowing him to realize his goal of providing healthy foods to people who need it most.

Plus Benedict gets to literally pay his loan forward.

“I love knowing that every month when I make my payment that money is going from me to the next farmer and small business owner,” Benedict said. “And if we really talk about equality, there are different ways to level the playing field. One of them is childhood and prenatal nutrition. So, if we can get healthy and organic food to people who can’t afford it, that’s the mission.”

Szymaski, who recently visited Benedict’s farm, said she was impressed with the progress he has made. His success, she said, is exactly why she loves doing the work she does. 

“He’s thriving,” she said, recalling her visit to Benedict’s farm. “This is really social work. It’s lending, but we’re not a bank.”

Greens grown by Desert Sky Produce Courtesy of Local First Arizona

Buy produce from Desert Sky Organic’s new co-op at 9110 N. Highway 191, McNeal, AZ, call (520) 200-0549 or visit www.thelocalcoopaz.com.

Learn more about Community Investment Corporation’s low-interest lending for rural and underserved communities here.

Learn more about AZNavigator’s free assistance for Arizona small businesses here.

Read the original article on Local First Arizona.

CIC Launches STAC

Tucson Small Business to Have Access to $500,000 in Revenue-Based Financing Through Innovative Nonprofit Partnership

Community Investment Corporation partners with Startup Tucson, Common Future / Community Credit Lab to bring $250,000 in investments to STAC Initiative to support small businesses in Tucson.

 January 30, 2023 (Tucson, Arizona) – Local small businesses and business owners that are unable to access traditional commercial loans are getting some help from two local nonprofit organizations. Tucson-based Community Investment Corporation (CIC) and Startup Tucson, are partnering with a national leader in innovative community-based economic development work, Common Future, and their in-house investment entity, Community Credit Lab, to launch a new business financing initiative, Success Through Alternative Capital (STAC), which aims to help businesses without adequate collateral or assets to qualify from traditional loans.

Common Future is investing $250,000 in the pilot program which CIC is matching with $250,000 of its own funds. Startup Tucson, for its part of the partnership, is providing business and entrepreneurial education to support local business owners who access STAC funding. Eric Horvath, Director of Capital Strategies for Common Future explained his organization’s reason for investing in Tucson. “We wouldn’t be here if it wasn’t for the trust and belief that we have in CIC and Startup Tucson,” he said. “What really stood out was the dogged determination to innovate and do something different from both organizations and to maximize how much community impact we can have.”

STAC is designed as revenue-based financing (RBF) allowing small businesses to pledge future revenues for an advance of financial capital. Payments can vary depending on how well a business does and its gross revenues after receiving funding. Businesses have higher payments when they are generating more revenues and lower payments when they are generating less revenues, an arrangement that can be especially useful for seasonal businesses.

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The revenue-based approach is being facilitated by CIC’s technology partner, Ned, which will help the lender build capacity and make loan decisions in days rather than weeks. Ned’s end-to-end revenue-based financing platform will enable CIC to streamline applications, qualification and disbursement activities, and then automate revenue-based repayments on the backend.

“Ned has been a fantastic partner for us,” said Danny Knee, Community Investment Corporation’s Executive Director. “Their platform provides efficiencies that allow us to spend our time helping businesses rather than evaluating them.”

STAC is expected to fund 25 local businesses over the next year that the program partners say will be used to purchase essential equipment, purchase inventory, and to meet the cash flow demands of running a business.

“Our economy works well for people with existing wealth,” said Knee, “But the over-reliance on asset-based lending without complementary alternatives makes it nearly impossible for many small businesses, and especially those run by entrepreneurs of color, to get the financial capital they need to grow and succeed.”

Asset-based underwriting is the practice of securing loans with the pledge of turning over a company or personal assets to a lender if a business owner is unable to repay a loan. Entrepreneurs of color have a harder time accessing traditional capital in the U.S. than their white counterparts due to persistent wealth gaps and owning fewer personal and business assets. “We are trying to find ways to make our economy more inclusive,” said Liz Pocock, CEO of Startup Tucson. “We believe revenue-based financing is a way to support emerging entrepreneurs, including entrepreneurs of color.”

Interested businesses should contact Community Investment Corporation through their website:
https://cictucson.org/stac/.

CIC Tucson Offers FREE Financial Literacy Classes

Community Investment Corporation believes in RADICAL access! That’s why we offer FREE financial literacy classes online!

Join us on January 18 and 25 from 6-8pm* as Executive Director Danny Knee and Business Manager Betty Vinall walk through what a Profit and Loss Statement and Balance Sheet are, and how they are crucial to your small business. Bring your questions!

Take advantage of this opportunity for FREE education and access to financial literacy! If you’re not available for these, have no fear. We post every info session and workshop on our YouTube channel so you can learn on-demand.

 

*AZ Mountain Standard Time

The Profit & Loss Statement

The Balance Sheet

Have you ever been asked “How profitable is your business?” and not known what to say? Have you ever tried seeking funding for your business and come to a dead-end when you were asked for your “P&L”? 

We will cover the basics of one of the most important financial documents in business, the Profit & Loss Statement (or “P&L”). 

You’ll learn: How to read a P&L from top to bottom, without getting your eyes crossed by all the numbers. What steps to take to organize your information so you can fill out your own P&L. 

We’ll cover how to do it the old-fashioned way (pen and paper) and using the latest technology (cloud-based software solutions). How to use the P&L to better run your business and seek financing (e.g. a loan, investor, etc.). 

The course is delivered in lecture style. Are you a small business owner, entrepreneur someone just setting up a business or non-profit? The course is designed for those wanting to keep better finances themselves, or those who already have a bookkeeper or accountant but don’t know how to interpret their finances. English literacy and familiarity with basic arithmetic (addition, subtraction) necessary.

Have you ever been asked “How much is your business worth?” and not known what to say? 

The course being offered will cover the basics of one of the most important financial documents in business, the Balance Sheet. 

You’ll learn: How to read a Balance Sheet, and its three primary components: Assets, Liabilities, and Equity. What steps to take to prepare a simple Balance Sheet, so you know what your business is worth. 

The course is delivered in lecture style. Are you a small business owner, entrepreneur someone just setting up a business or non-profit? The course is designed for those wanting to keep better finances themselves, or those who already have a bookkeeper or accountant but don’t know how to interpret their finances. English literacy and familiarity with basic arithmetic (addition, subtraction) necessary. 

Register for P&L
Register for Balance Sheet

Meet the Teachers

Danny Knee has two decades experience in the public and nonprofit sectors, including 14 years in executive management. He has experience as an entrepreneur and small business owner and was named one of Tucson’s “40-Under-40” in 2007 for contributions to his profession and the community. 

Betty Vinall has been with CIC since 2004, has 35+ years of experience in bookkeeping, and is owner of Balanced Books LLC, a bookkeeping business specializing in working with nonprofits and small businesses.

2022 In Review

Celebrating our biggest year yet!

What a year it has been indeed!

While it feels nearly impossible to condense an entire year into one newsletter, we couldn’t close 2022 without taking a look back at the highlights from this year.

Join us in celebrating CIC’s biggest year to date, and we’re just getting started!

A national leader in eviction prevention

Over the course of 2 years, we were involved in a collaborative effort to administer federal funding to prevent evictions related to the economic impact of the pandemic throughout all of Pima County. As one of the most efficient programs in the nation, CIC and our partners facilitated disbursement of all of the City of Tucson’s ERA 1 and ERA 2 funds, as well as more than $22.5 million of additional reallocated funding from the state. In June of this year, we transitioned the Eviction Prevention Program to Pima County.

Since the start of the program we distributed $64+ million in rental and utility funding, assisted over 13,500 households, landlords and helped 30,000 residents remain in housing.

We owe much of the success of the program to our dedicated and willing community partners. Private, public and nonprofit sectors as well as private citizens came together selflessly to care for one another in the face of the unprecedented challenges of the pandemic. Thank you: City of Tucson, Family Housing Resources, Sunnyside Foundation, Catholic Community Services, ISDA, Tucson Urban League, Inc., Primavera Foundation, International Rescue Committee, Interfaith Community Services, Chicanos Por La Causa, Valley Assistance Services and Compass Affordable Housing.

Read our IMPACT REPORT

Expanded the Mortgage Credit Certificate program statewide

For 30+ years, the Mortgage Credit Certificate (MCC) program has been administered by CIC, and its sister organization, Family Housing Resources. The program reduces the cost of owning a home by allowing first-time homebuyers to claim up to $2,000 of their annual mortgage interest as a federal tax credit – each year and every year they live in their homes. This means that MCC’s can save homeowners up to $50,000+ over the life of their mortgages!

CIC has issued 7,000+ certificates to date, saving Arizona homeowners millions of dollars and this year, we expanded the program statewide! We look forward to empowering future homeowners throughout the state of Arizona. Check out this short video that explains how this important program works.

Learn more at: cictucson.org/mcc

The BIPOC Community Managed Loan Fund for Small Business Owners continues to grow!

Since launching the BIPOC Community Managed Loan Fund program, we’ve received 100+ applications, with requests for $700,000+ to help long underserved entrepreneurs of color in Southern Arizona grow their businesses and thrive. 

We were thrilled to share that in 2022 we fundraised over $100,000 to support this program. The revolving fund that started with just $2,700 in donations from CIC’s own staff  now sits at $380,000 and has helped 26 small businesses in Southern Arizona.

This funding is critical to our mission’s success and helped us get closer to our goal of building the fund to $1 million by 2025.

Check out this short video to learn more about this program.

CIC Tucson was named Social Impact Champion of the Year!

We were honored to be recognized by the selection committee of the Tucson Metro Chamber Copper Cactus Awards as this year’s TEP Social Impact Copper Cactus Champion. This is the second time in three years, CIC has earned this recognition and it is one of the only times that a nonprofit has been honored with a Copper Cactus Award three years in a row (we were named the regions Diversity, Equity, and Inclusion Champion in 2021 for the launch of our BIPOC Community Managed Loan Fund).

While we don’t do this work for the awards, this was a special moment to stop and celebrate everyone who has contributed to making our programs worthy of recognition; most notably, the community’s best and most accomplished social service agencies who partnered with us for the Eviction Prevention program. Thank you to the City of Tucson, Family Housing Resources, Sunnyside Foundation, Catholic Community Services, ISDA, Tucson Urban League, Inc., Primavera Foundation, International Rescue Committee, Interfaith Community Services, Chicanos Por La Causa, Valley Assistance Services and Compass Affordable Housing. 

This program would not have been possible without the deep commitment of the highly skilled staff at the nonprofit organizations & government entities.

2022 brought an amazing year of success and impact for CIC, none of which would have been possible without the collaboration and support of trusted partners. We resolve to fill the coming year with opportunities and prosperity for all residents of Southern Arizona.

– Danny Knee and the CIC Team