SANTA ROSA, Calif. (10/3/13)--Redwood CU, based in Santa Rosa, Calif., has entered a strategic partnership with Community Action Partnership (CAP) Sonoma to help fuel the business economy in Sonoma County by offering up to $1 million in loans to microbusinesses and startups.
The microbusiness loans are the newest addition to the more than $2.2 billion asset credit union's small business and consumer loan programs.
In the partnership, RCU has committed up to $1 million in loan financing to graduates of CAP Sonoma's microbusiness development program to support growth and expansion of microbusinesses in the community. The microbusiness development program has graduated 30 people since its inception. CAP Sonoma provides financial education designed for small business owners and individuals who seek to start or currently own microbusinesses.
"RCU recognizes small and microbusinesses often have difficulty in obtaining the financing needed to initiate a business or expand," said Anne Benjamin, RCU's chief operating officer and executive vice president. "RCU is committed to our community and we believe funding the growth of microbusinesses is a positive way to impact these businesses as well as the economic growth and vitality of our county," she added.
CAP Sonoma's program includes 15 classes offered in both English and Spanish and is based on an enhanced NxLevel curriculum in which graduates must achieve at least 80% or greater on the final exam, have 80% attendance or greater, and have developed a business plan. CAP Sonoma added personal financial literacy and business financing readiness modules to augment the existing NxLevel curriculum.
The personal financial literacy course is based on the Federal Deposit Insurance Corp.'s MoneySmart curriculum. CAP Sonoma has offered financial literacy classes since 2004, and has graduated over 200 students from its personal finance program.
The program's graduates are owners or entrepreneurs of a variety of businesses, including a landscaping company, cleaning services, a palette recycling company, bakeries and a wholesale clothing outlet.
"As part of our program, we help our students draft a business plan, secure a mentorship with an existing business owner, and prepare them to meet with a loan officer," said Lannie Medina, chief development officer of CAP Sonoma. "RCU's extensive commitment to the success of the microloan program and our community overall has been inspirational and motivating," said Medina.
Credit unions have been urging Congress to lift their member business lending cap to 27.5% of assets from 12.25% so credit unions can make more MBLs. Lifting the cap would help create 140,000 new jobs and inject $13 billion in small business loans into the economy, without costing taxpayers a dime, said the Credit Union National Association.