May 13, 2015
CEI Launches New Mission-Oriented Small Business Lending Company
CEI 7(a) Financing LLC Offers Loans of up to $5 Million Throughout Contiguous U.S.
May 12, 2015 (Portland, ME)—Maine-based Community Development Finance Institution (CDFI) Coastal Enterprises, Inc. (CEI) recently expanded its extensive range of financial and development services for small businesses by launching a new national Small Business Lending Company – one of a small number of non-bank lenders qualified to participate in the U.S. Small Business Administration’s (SBA’s) flagship 7(a) lending program.
CEI 7(a) Financing LLC (C7a), a wholly-owned subsidiary of CEI, will make loans of up to $5 million to qualified small business borrowers. The 7(a) program’s purpose is to make loans available to viable small businesses – particularly in rural regions – that cannot otherwise obtain loans at reasonable terms from conventional sources.
C7a’s lending focus extends CEI’s mission to help create economically and environmentally healthy communities in which all people, especially those with low incomes, can reach their full potential. It expands CEI’s national portfolio, which includes a New Markets Tax Credit practice, venture capital funds, sustainable agriculture, fisheries, and forestry work, and policy initiatives focused on the Triple Bottom Line return on investment – economy, equity, environment.
“As one of the country’s leading and rural economic development practitioners, for over three decades CEI has sought innovative ways to move capital into communities that lack access to traditional business financing and community development resources,” said Ron Phillips, President and CEO of CEI. “Our model continues to evolve with new tools and strategies to help provide opportunity for all Americans in the 21st century.”
C7a’s lending activities enhance the existing financing programs and activities of CEI and economic development practitioners in other states. Its collaborative business model is based on providing complementary loan products and building an extensive referral and support network through partnerships with other economic developers, mission-based lenders, and business and industry consultants.
“There is clear demand and need for ethical, non-bank, small business lending capacity,” said Rob Wilson, C7a’s CEO. “The businesses that our economic development partners are referring to us as potential borrowers are seeking the loan product that C7a brings to the market.”
Chris Sikes, President and CEO of Western Massachusetts-based Common Capital, commented, “C7a understands the needs of small businesses as well as the opportunities to work with smaller, community-based, nonprofit lenders like us. C7a also extends CEI’s knowledge and willingness to collaborate in technically complex, large-scale national financing programs.”
C7a’s loans complement most CDFIs’ existing loan products. With a range between $400,000 and $5,000,000, C7a’s loans are generally in excess of CDFI’s normal capacity or lending limits. The 7(a) program’s goal of providing affordable credit to businesses that cannot obtain it elsewhere, e.g. from a typical bank or commercial lender, allows C7a to finance viable businesses that fall short of bank credit criteria. Early stage companies seeking growth capital, principals pursuing acquisitions, successful operators with limited collateral, and experienced management repositioning companies have all benefited from the 7(a) program. Uses of loan proceeds are flexible and can include owner-occupied real estate acquisition, construction, or rehab, equipment purchase, long-term working capital, business acquisition (including good will) and working capital financing.