Entrepreneurs on the city’s West Side can tap into more funds to start up or expand through a new micro-loan program.
First Niagara Financial Group partnered with the nonprofit Westminster Economic Development Initiative on the program, through which the Buffalo-based bank will make available a total of $100,000 to businesses that do not qualify for conventional funding. The loans will be as large as $15,000 each and WEDI will decide who receives them.
The micro-loan program was inspired by a previous connection between First Niagara and WEDI.
Last year, First Niagara gave $500,000 to five area organizations to support entrepreneurs and startups on or near the Buffalo Niagara Medical Campus. WEDI was one of the recipients, and used its $100,000 grant to establish a revolving loan fund.
By June, WEDI had exhausted the funds, after making loans to 10 businesses. Instead of having to wait for those businesses to pay off their loans and “revolve” the funds back in, the new program with First Niagara allows WEDI to make more loans.
The bank was impressed with WEDI’s ties to the West Side and its ability to help businesses grow, said Elizabeth Gurney, executive director of the First Niagara Foundation. “They had a pipeline of people waiting.”
Businesses that apply for the loans need to go through financial capability training, create or review a business plan, and create financial projections with a WEDI staff member. The approved applicants will be matched with a volunteer business coach.
WEDI will focus on serving economically disadvantaged people who have had trouble obtaining conventional financing through a bank, either for startups or existing businesses.
“We’re not competing with the banks and never want to,” said Ben Bissell, the nonprofit’s executive director.
Ideally, a company that uses a group like WEDI for a loan will grow to the point where they are considered creditworthy by a conventional lender, said Buford Sears, First Niagara’s Western New York regional president. “We’re trying to start off with small seeds and grow large plants from those seeds.”
Potential applicants for the micro-loan fund can contact WEDI at 393-4088 or email firstname.lastname@example.org.