By the time a client gets a loan from The Loan Fund, she’s in a committed partnership with the nonprofit lender. That’s because The Loan Fund offers business development consulting to all potential clients — not just those who receive loans.
The Loan Fund loan officers provide “pre-loan consulting” the moment they receive an inbound call or greet an office visitor. And consulting continues after the client walks out the door — either to get more prepared or to start putting the loan money to work building a business, creating jobs and improving communities. The Loan Fund is fully invested with the people whose business startup and expansion plans it helps finance —even with those who aren’t ready for a loan.
To fulfill its mission “to provide loans and assistance to improve the economic and social conditions of New Mexicans,” The Loan Fund offers the kind of advice and support that help businesses grow and reach sustainability.
But even if the business isn’t ready for a loan right away, the owner benefits by talking with The Loan Fund. If a loan officer sees the business isn’t ready for a loan, she can help the business owner develop a strategic plan or refer him to the Small Business Development Center or WESST, where the applicant can attend business-training workshops.
The Loan Fund and its clients share a mutual benefit in ensuring that a client’s business is sustainable or is growing. When a loan recipient succeeds in business and repays the loan, those funds become available to other businesses, many of which might not qualify for a loan from a traditional lender.
If a business fails and the client defaults, those funds are lost, and that makes it harder for The Loan Fund to ask its funders — the New Mexico Small Business Investment Corporation, USDA Rural Development and the Small Business Administration, as well as private donors — for more loan capital.
In fact, such pre- and post-loan assistance is required by some state and federal organizations. For example, when the SBA initiated its relationship with The Loan Fund in 2011 by providing $750,000 in funds for small-business loans, it awarded an additional $170,000 to underwrite technical assistance services. That money allowed The Loan Fund to hire professional consultants with intimate knowledge of local markets.
By 2019, the budget dedicated to technical assistance had more than doubled. New Mexico businesses are now served by three consultants who visit each loan recipient at least once a year to provide advice about potential weaknesses that hobble growth. These visits are more frequent when the client requests assistance for specific changes.
In the thirty years since making its first loans in 1990, The Loan Fund has loaned more than $108 million to New Mexico’s financially underserved small businesses, entrepreneurs, and nonprofits, which have helped create or preserve more than 11,500 jobs across New Mexico.
Call The Loan Fund at 505-243-3196 or learn more here.
Finance New Mexico article 409.750 with assistance from George Kenefic, Director of Enterprise Empowerment, The Loan Fund