Business Impact NW Becomes Alaska’s First SBA Microlender
A Cowork by RSD shared office in downtown Anchorage hosts Business Impact NW, a nonprofit that offers microloans from the US Small Business Administration.
A partnership between the federal government and a nonprofit consulting firm is extending microloans to small businesses in Alaska.
Micro Help, Macro Effect
Business Impact NW (BIN) opened a new Lending & Technical Assistance Office in downtown Anchorage, which combines its microlending division with its previously established Veteran Business Outreach Center. A long-standing partnership with the US Small Business Administration (SBA) allows the office to service loans ranging from $5,000 to $50,000.
SBA Alaska District Director Steve Brown says microloans “fill such an essential gap that we’ve had.” Business owners or startups who meet SBA criteria can qualify for seven-year loans at a 7.75 percent fixed interest rate.
“There’s an obvious niche for those small dollar loans that have not been available,” says Greta Stough, chief strategic development officer for BIN.
“It’s probably going to make the world of difference to that small business owner who wouldn’t have been able to get that capital previously,” she adds. “It might be hiring another staff person, it might be getting a piece of equipment, but that’s likely going to leverage a whole new set of opportunities for them.”
Victor Saldanha, BIN’s chief lending officer, agrees. “I have businesses that have been established for many, many years, and they just need some additional financing to buy a truck, to buy a piece of equipment, [or] to hire employees,” he says, “and what we try to do is remove barriers to entry for that.”
Saldanha says BIN’s clients are often referred from other offices, such as the UAA Small Business Development Center, for the nonprofit’s coaching and consulting services. Now those services include SBA-backed financing.
Even for-profit banks sometimes refer clients to BIN. “We partner with a lot of financial institutions who will say, ‘We have this great business with us; unfortunately, we have to turn them down.’ There’s regulations that banking has to follow, so we get that client,” Saldanha says.
SBA Deputy District Director Jeff Salzer says microlending expands the pool of Alaskans who have access to business loans. “Some of the folks previously weren’t bankable,” he says, “and it helps them kind of mature and get into that space.”
Despite taking on borrowers who are, almost by definition, too risky for commercial banks, Stough says BIN’s repayment rates are at 99 percent. She says that’s thanks to the technical assistance the office also provides, guiding borrowers toward financial success.
“We envision a world where every business owner has an equal opportunity to succeed,” Stough says. “We especially strive to serve those who have met barriers to receiving financing for business ownership. No matter where a business owner or entrepreneur is on their small business journey, we offer assistance to meet their goals where they are right now.”
BIN started in Washington state in the late ‘90s and has had a presence in Alaska for the last nine years. It has been an SBA partner all along.
“The SBA does a great job of bringing everybody together and helping them understand the strengths that they have and where they can be complementary with others,” says Stough.
Another “other” is launching this summer, with the addition of Alaska’s first Women’s Business Center. The SBA announced in April that the Seattle Economic Development Fund is sponsoring the office, the 141st in the nation and the completion of a network in every state. Though the new center will specialize in counseling and training female entrepreneurs, women are just as welcome at BIN.
“One more set of business coaches,” Stough says.