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CEF: Strengthening Colorado’s Small Businesses & Supporting Minorities

CEF: Strengthening Colorado’s Small Businesses & Supporting Minorities

Statistically, it’s likely that many readers are familiar with at least one small business.

According to the Small Business Administration, Colorado’s 573,000 small businesses constitute about 98 percent of all businesses and employ more than 60 percent of all employees in the state. Yet for as many successful businesses as there are in Colorado, financial lending by larger banks is often out of reach for many small businesses. That’s where the Colorado Enterprise Fund (CEF) steps in.

CEF was organized in 1976 as a nonprofit lending source especially focused on new and burgeoning small businesses unable to secure more traditional loans from other financial institutions.

As a 501(c)3, CEF is able to provide sustainable resources and financial lending to small businesses throughout the state through the collaborative funding it receives from across both the public and private sector. Largely, the numbers would suggest that CEF’s funding model and unique ability to lend to small businesses left behind by other financial institutions has worked.

In the past 40 years, CEF has supported more than 16,000 jobs in 1900 different small businesses with $55 million in loans.

CEF’s mission statement reads, “To accelerate community prosperity by financing and supporting entrepreneurs and small businesses,” and the programs they support financially showcase the commitment they have to the community beyond just supporting small businesses. Their work continues to extend into the health and wellness of the many communities they and their network of small businesses serves. Beyond that, the work CEF commits itself to has long-term benefits for demographics traditionally left out of financial lending. In an interview for Out front, CEF spoke about its work.

We wanted to share two of the most important topics we discussed.

The Small Business Administration reported that nationwide, 14.6% and 36% of all small businesses were owned by minorities and women, respectively. Fifty percent of CEF’s loans are to businesses owned by women, and 25% are to businesses owned by minorities. What explains the increased representation of women and minorities in CEF’s lending?

As a certified Community Development Financial Institution, we exist to provide equitable access to capital for populations that have difficulty qualifying [for] traditional bank financing.

We proactively target underserved segments of our communities to create a more inclusive economy with opportunity for all.

Post-recession banking laws continue to constrict banks and affect access to capital for many small businesses, especially women and minorities who might be more likely to have less collateral, weaker credit histories, and more limited cash flow to qualify for a bank loan, or just want smaller loans under $250,000 that banks don’t want to do. That’s where CEF comes in. We focus on supporting borrowers in these categories as part of our mission-driven lending model.

One testimonial of CEF’s services reads in part, “Without CEF we wouldn’t be in business today.” Looking at all the work CEF has done with small businesses across the state, where do you see CEF going over the next four decades? Is there room for CEF’s mission to evolve?

As long as there are people with ideas to address needs in our society, there will be small businesses that want to forge solutions.

To that end, we see ourselves continuing to provide affordable loans and consulting services to a range of small businesses not served by banks, while also specializing in funding specific initiatives.

An example is our Healthy Food Fund which provides special financing to food-based businesses in Colorado that offer healthy, fresh food options in urban and rural communities known as “food deserts.” Through our expanding partnerships with city and county municipalities in Colorado, we’ve also created microloan funds that leverage government, private sector, and CEF dollars to provide more capital for small businesses to start and grow in these communities.

Finally, we see our mission growing to include more real estate-based projects in under-resourced communities where CEF can expand its impact on community needs and increase its scale of job creation by financing projects that bring together the public and private sectors to develop business-, nonprofit-, and community-based enterprises.

After 40 years, CEF remains open for business. Those who want to donate to the work of CEF or receive financial lending for their small business are encouraged to visit their website.

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