Our Programs

Scaling Micro-Lending Capacity

The Need

According to FIELD, a leading U.S. economic development think tank, over 10 million entrepreneurs, especially those who are economically and socially disadvantaged, lack access to small business capital. While the formal banking sector provides loans to small businesses, and government programs such as the Small Business Administration (SBA) seek to increase their availability, many entrepreneurs cannot access these mainstream sources of capital. Frequently, businesses are not able to obtain bank or SBA loans because:

  1. The loan request is too small for the banks to consider
  2. The borrower's credit history is insufficient
  3. The borrower's business has not been in operation for a sufficient amount of time

These challenges prove especially daunting, especially for minority/women and immigrant/refugee entrepreneurs who must also overcome existing or perceived cultural barriers.

The Response

While microfinance in the U.S. has a strong foothold, the industry has not yet risen to scale. The Business of Good Foundation intends to help expand the ability of MFIs into underserved markets, by:

  1. Forming meaningful partnerships with other community-based organizations to reduce marketing costs and expand lending footprints of entrepreneurial microfinance
  2. Diversifying funding sources to include corporations willing to make socially responsible investments, to both increase lending capital and cover operational costs
  3. Implementing technology solutions that lower the cost of lending operations

To address the need, TBOGF is working closely with the Cleveland Foundation, Huntington Bank, and many other area microenterprise organizations, to bring Columbus-based Economic Community Development Institute's “Invest Local” fund to Greater Cleveland. Additionally, TBOGF and others are helping Bad Girl Ventures expand its women-focused micro-entrepreneurship support program, along with Samuel Adams' “Brewing the American Dream” program, in partnership with ACCION USA, to serve the Northeast Ohio market. All the above new microenterprise lending and support capacity will be located at the new Shaker LaunchHouse.

The Impact

Micro-lenders across the U.S., like ECDI and BGV are successfully bridging the credit gap that is prevalent within low-to moderate-income communities. By creating a highly efficient and effective lending model adapted to meet the needs of micro-entrepreneurs, The Business of Good Foundation and its consortium will measure its impact by the number of loans made, sales generated, and jobs created by those it serves as a result of this innovative, multi-player partnership.