NCDA Winter Conference Audrey Nelson Award Recipient: Lawrence Venture Fund Lawrence, MA 2/7/17

About Lawrence 25 Mi. North of Boston 7 Square Miles Population 72,043 (2000) to 76,377 (2010), and 77,312 in 2012 76 % Latino Median HH Income $32,581 (2013) v. $67,888 in state 30% Homeownership Rate

Founded in 1845 by the Essex Company as a planned industrial city History of Lawrence, Mass. Founded in 1845 by the Essex Company as a planned industrial city

Lawrence Neighborhoods

More About Lawrence Unemployment Rate Twice State Average Every census tract except one >51% Low/Moderate Income Population Annual CDBG = $1.7 Mil down to $1.3 Annual HOME = $1 Million down to $.6

A Partnership is Formed In 2014 a group of Civic, For Profit, Non-Profit, and Institutional Community Stakeholders form the Lawrence Partnership. Goals: Boost economic activity Leverage social and political clout of members to affect change Highlight the many good things in the city and collectively support ongoing efforts Serve as an agent of change Set and pursue both long and short term goals to be implemented

Early Initiatives Small business lending was quickly became one of the Partnerships challenges to overcome. Challenges: Business were un-bankable Lack of technical proficiency among businesses No true programmatic infrastructure to help Opportunities: Banks were at the table Strong non-profit presence among members Many technical assistance providers willing to coordinate

A Solution is Considered Venture Fund is Formed With risky loans, no one bank was willing to go at it alone. Four banks came to the table and said if the others participate, so will we. 4 Banks Contribute $250,000

The Power of Peer Pressure As the program gained momentum, more banks saw it as opportunity to access this market with minimal risk. 6 More Banks Contribute $250,000

City Contributes 10% Loan Loss Reserve Fund CDBG Fills The “Risk Gap” Even with 10 participating banks, they still felt the risk exposure was too great City Contributes 10% Loan Loss Reserve Fund 10% of $2.5MM = $250,000 (CDBG) The city writes a check for 10% of the loan for every loan issue and is held in escrow.

Who Manages Operations? Mill Cities Community Investments (MCCI) has long been a partner to the city of Lawrence. Managing the lead abatement financing program and serving as an underwriter to our business loans, MCCI is a strong and trusted partner. MCCI’s Role Underwrite loans Manage relationship with businesses Prepare and present loan documents to LP Board, City of Lawrence, and MCCI Board Connect business to other technical assistance services

Who Else Does Stuff? Administering this program has many layers and many players. Lawrence Partnership Promotes and Advertises Manages relationship with banks Assemble and manage loan committee City of Lawrence Ensures national objectives are being met Banks Manage among each other the issuance of checks Managed mostly by Enterprise Bank

Is it Working? A total of 8 business have taken advantage of the program totaling in $545,000 in loans. Another $300,000+ is currently in the pipeline.

What Success Looks Like El Pez Dorado: Business Type: Restaurant Years in Business: 13 Loan Amount: $45,000 Use of funds: $30,000 to pay off hard mon lender $15,000 for working capital Saturnino Peralta and his wife, Yaniry Espinar, at El Pez Dorado in Lawrence (Commonwealth Magazine)

Celebrating Success

Questions?