An Elmwood Avenue chocolatier. An East Side distributor of environmentally friendly medical supplies. Minority and female subcontractors looking to rise to prime contractor status.
What do they all have in common? None of them had what it took to qualify for a traditional bank loan. Each of them turned to PathStone Enterprise Center to secure the funding, training and technical support they needed to get a startup off the ground or lift their small businesses to the next level.
PathStone will now be able to lend even more funding and support to unbanked Western New York entrepreneurs thanks to a $1 million grant from the KeyBank Foundation. The grant is part of KeyBank's five-year pledge to commit up to $5.8 billion to programs in markets where KeyCorp and First Niagara Financial Group overlapped. That pledge was made last year to address community concerns about KeyBank's acquisition of First Niagara.
The $5.8 billion is part of KeyBank's total Community Benefits Plan budget, which sets aside $16.5 billion to be invested in communities in KeyBank's market areas over the next five years.
KeyBank Foundation said it chose to invest in PathStone because it hit its three "NEW" criteria – neighborhoods, education and workforce. More specifically, Key liked the goals of PathStone's minority business assistance project, which aims to increase the number of minority-owned businesses in Buffalo by 5 percent and the number of minority-owned businesses with employees by 10 percent over the next five years.
"It's not just the knowledge and experience they bring to the table, that they can make and nurture loans," said Catherine Braniecki, Key's regional corporate responsibility officer. "It's their ability to take startups and help them become self sufficient to the point where they can employ people."
The money granted to PathStone, which will be paid over five years, represents a significant addition to the East Side nonprofit's current operating budget of $1.2 million. The nonprofit has $12 million in assets, including a loan portfolio of $7.5 million.
The grant funds will go toward adding staff to identify and support clients. Now, the PathStone Enterprise Center is a two-person operation.
"Money for staff doesn't seem like a big deal, but right now, we're limited by how many hours I have in the day," said Jonathon Ling, business development officer at the PathStone Enterprise Center on Jefferson Avenue.
Ling described himself as part community organizer, part loan officer. Rather than just signing off on loans, he does extensive work with entrepreneurs before and after they reach the loan stage. He also works with other small business organizations to foster businesses. Additional staffing could double the number of people the Enterprise Center is able to help, he said.
"There are a lot of opportunities for folks to get in on in the new Buffalo," Ling said. "The small business ecosystem is growing."
Key's $1 million grant to PathStone is just the first of what is expected to be Key's significant investment in the Buffalo Niagara region.
"I think it's fair to say that Buffalo Niagara will probably end up with the largest share of the $5.8 million as compared to other markets," said Buford Sears, Key's regional president in Buffalo.