Denver, April 29, 2021 – Colorado Enterprise Fund (CEF) announces its 2020 fiscal year-end results with the largest lending and funding year ever, and unprecedented demand for its small business loan programs and technical assistance service, particularly in response to the COVID-19 pandemic. This was CEF’s largest lending year since the organization was founded nearly 45 years ago.
In the fiscal year that ended September 30, 2020, the nonprofit lending institution provided a total of nearly $32M in loans to 1,115 Colorado small businesses. Of those loans, $18M was provided in the form of Paycheck Protection Program (PPP) loans via the CARES Act to 779 small business borrowers and $5.1M in other Covid-relief programs. In total, the financing made it possible for Colorado businesses to add or retain 5,579 jobs in 2020.
Over the past several months and through the pandemic, CEF worked closely with Colorado’s small businesses to connect them with loan and grant programs to sustain them during these challenging times. “We have seen how important it is for small businesses to have multiple levels of support.” said President and CEO of Colorado Enterprise Fund, Ceyl Prinster.
Paycheck Protection Program Loans
Since April, CEF has processed nearly $18M in loans to 779 Colorado businesses through the Small Business Administration’s Paycheck Protection Program (PPP). Of the 779 loans, 77 percent were to new CEF borrowers. As part of CEF’s efforts to assist Colorado small businesses through the impacts of COVID-19, the nonprofit partnered with key lenders that provided CEF with the funding to help vulnerable small businesses, saving 2,990 jobs through PPP loans, a financial lifeline to business continuity. CEF received 1,083 total PPP loan applications and deployed a total of $17,994,760 with an average loan size of $23,100.
The PPP loans provide financial relief for both the business and its employees to help position them to recover and rebuild in the new COVID environment. An example is Early Success Academy (ESA), a CEF borrower for nearly 20 years. ESA applied to get PPP funds from their bank during the first round of PPP funding, but was rejected for unclear reasons. Worried that they would have to close their business after two decades of providing invaluable childcare and educational services for many working families, they reached out to CEF, since CEF began offering PPP loans in the second round.
Within less than a week, ESA’s PPP application was approved, closed, and funds were deposited to their bank account by CEF. “Once again, CEF has come to the rescue. Because of their swift action and personally helping us navigate through the complex government requirements, we now have the funds to re-open in 30 days with all nine employees still on board,” said Executive Director, Diana Gadison. “The rent will be paid, and health insurance is intact with no interruption in benefits. This is critical for my employees, including myself, who are being treated for or are recovering from various health conditions.”
In addition to financial support, CEF has also provided more than 265 hours of free coaching services to help businesses through the PPP application process and make strategic decisions about surviving this period of little or no revenue due to mandated business closures and reduced economic activity.
COVID-19 Relief Loans
Thanks to investments from partners in seven cities and counties, CEF has been able to process 183 COVID-19 Relief Loans to date, totaling $5.1M. To help with immediate relief, recovery and rebuilding efforts, these loans were available on a first-come, first-served basis to small businesses located in Adams County, Arvada, Brighton, Centennial, Commerce City, Larimer County and Weld County, as well as to oral health providers in Colorado via a fund through Delta Dental of Colorado Foundation. CEF continues to work to obtain additional funding in other geographic areas and increase availability in the existing funds to help more small businesses across the state.
“It’s our commitment to continue to help small businesses throughout the state survive during this stressful time, and through the inevitable ripple effects to come,” says Prinster. “The primary goal of these COVID-19 Relief Loans has been to help stabilize vulnerable small businesses and ultimately retain jobs and businesses.”
For the first time, CEF partnered with El Paso County and the City of Boulder to process applications for grants to small businesses and was also selected as a participating lender for the statewide Energize Colorado Gap Fund. The goal of these partnerships was to create a fair and smooth process so funds would get to those that need it most and as soon as possible. The funds for the grants were used from the CARES Act Coronavirus Relief Fund to help small businesses and nonprofits that have been adversely affected by the pandemic. The funds under these programs were awarded as grants rather than loans and do not have to be repaid. Funds can be used to cover costs such as rent and mortgage, utilities, employee payroll, accounts payable and other fixed debt costs, and personal protection equipment. Funds cannot be used for taxes or tax debt.
In September, El Paso County’s Economic Development Department awarded $13,858,527 in grants to 864 local small businesses and nonprofits as part of the El Paso County Regional Business Relief Fund program, making it one of the largest COVID-19 relief programs in the nation led by a local county government. The average amount awarded is $16,039. In October, The City of Boulder was able to approve $679,000 in grants for 205 businesses and nonprofits with an average award of $3,312. Through the Energize Colorado Gap Fund, CEF processed 443 grant applications for a total awarded amount of $5,425,819 with an average grant amount of $12,248.
Core Lending Programs
Though COVID relief and recovery was a main focus of the year, CEF also maintained activity through their core lending programs. In FY20, CEF provided a total of $8,921,619 in loans to 151 Colorado small businesses, for an average loan size of $59,084. In total, the financing through their core lending programs made it possible for Colorado businesses to add or retain 2,584 jobs in 2020.
Alexis Bauer, owner of Octopus Coffee, first came across CEF while attending a small business conference on the Front Range last fall. Due to taking on unexpected debt to bring the building she was renting up to code, she was looking for innovation and ideas to stay afloat. Since she rented, she had been unable to qualify for traditional bank loans. She started conversations with CEF in late fall and by early January, she secured a $65,000 loan to help consolidate the debt and other operational expenses. “CEF has been a life saver. As we go through the pandemic and other challenges, I am so grateful to have a powerful ally in CEF. There is always someone to call at CEF; someone with ideas and time to listen,” says Bauer. “Owning a small business can sometimes feel isolating, but with CEF I feel I have a team, a valued support to turn to and find solutions with — and it’s made such a difference.” She’s also utilized CEF’s Business Acceleration Services for a variety of critical areas and plans to continue working with the team during the winter months.
Knowing that small business success requires more than financing, CEF also increased its business advisory services in 2020. Through CEF’s team of business coaches, borrowers get free, one-on-one coaching support to help them with everything from sales and marketing to hiring, finance and accounting, and business continuity during the pandemic. In 2020, CEF provided more than 1,700 coaching hours to 112 small businesses, focusing specifically on the impacts that COVID-19 had on these businesses and how best to deal with it.
“2020 has been anything but normal. Business is happening, but it’s not business as usual,” said Prinster. “We have been so honored and proud to be able to help the many small businesses that are unequivocally the lifeblood of our local communities across the state. We were able to do this with the funding we were able to secure –– and to those partners and institutions, we’re grateful. In the end, all of this support has helped our local communities remain resilient and Colorado strong.”
VALOR Loan Program for Veterans
Last month marked the three-year anniversary of CEF’s Veteran Access Loan Opportunity Resource (VALOR) program created to support U.S. military veterans and Gold Star Families (surviving spouses and children of veterans) in Colorado. The loan program provides discounted loan rates and extended terms for military veterans and Gold Star family members who are unable to secure financing through traditional banks.
To date, the VALOR loan program has helped 199 U.S. military veteran business owners in Colorado access $8.5M in small business loan capital and XX hours of business coaching support since the program launched. In total, the program has helped veterans create or retain 1,819 jobs in Colorado.
In October, CEF added Izzy Abbass to its Board of Directors. A veteran himself, Izzy served in the Army in Desert Storm. Since returning to the States in 1991, Abbass has not only had a successful career in telecommunications, he has passionately worked with several veteran programs around the state to help the men and women who have honorably served our country successfully transition and work and live in a civilian community.
“I joined the board to help veterans make a successful transition - just like I was able to,” says Abbass. “Our veterans bring a tremendous value to the civilian world, but they need to feel connected and a part of the community. Being involved with an organization like CEF will not only enable me to be that bridge between veterans and non veterans, but provide our veterans with the tools and support they need to realize their dreams of running a small business.”
New Market Tax Credit
In July, CEF was selected by the Community Development Financial Institutions (CDFI) Fund at the U.S. Department of Treasury to allocate $20M of New Markets Tax Credits (NMTCs) to banks and other investors to invest in Colorado’s low-income communities. A highly competitive process, 2020 was the first time CEF received the tax credits to distribute to projects in the state. The organization is using its NMTC allocation to attract private-sector investment in manufacturing and industrial projects that create and retain quality jobs, and in grocery stores to bring healthy food access to some of Colorado’s most economically distressed areas. With federal tax credits from the CDFI Fund as a new tool, CEF can build on its work of helping businesses across Colorado access nontraditional financing and support. The income generated from NMTC program fees will support CEF’s other direct lending and technical assistance to underserved small businesses in Colorado’s low-income communities.
“As a non-profit working with Colorado businesses and understanding local economies for nearly 45 years, we are looking forward to connecting investors to projects that benefit both the investor and the businesses in need of financing,” says Prinster. “And, as we continue to adapt during these uncertain and ever-changing times, projects will undoubtedly have additional challenges to raise the financing needed. These tax credits will spur investment to help move them forward.”
CEF was also awarded nearly $1.46M from the CDFI Fund– the largest amount CEF has been awarded in one cycle. This funding will be used to sustain and expand CEF’s small business lending and ultimately increase economic opportunity across Colorado.
Specifically, CEF received $900,000 in Healthy Food Financing Initiative (HFFI) funding to improve access to healthy foods, create jobs and revitalize communities across the country. Since 2012, CEF has disbursed $7,176,316 in HFFI funding to 151 food businesses, helping to increase food access in both urban and rural parts of the state, and strengthening the local food system. CEF lends to all segments of the food system to improve access to fresh, healthy food for Colorado’s residents and to promote economic and health benefits for communities designated as “food deserts.”
In an environment where historically marginalized business owners typically receive a small fraction of start-up financing, CEF was also awarded a Financial Assistance grant of $557,000 from CDFI to assist African American owned businesses and expand its impact on this underserved group of borrowers. With this award, the nonprofit expects to originate nearly $6M in affordable and flexible business loans to help new and existing African American entrepreneurs by fiscal year 2023.
Community Crime Prevention Initiative
In April 2020, CEF was awarded $305,000 for the Community Crime Prevention Initiative Program, "Transforming Safety,” which provides funding, training and consultation to borrowers who were previously incarcerated to start their own businesses. Business loans are usually unavailable to those who have been incarcerated, but a path to economic self-sufficiency and investment in community reduces recidivism and strengthen communities. With these funds, CEF will lend to small businesses operating in southeast Colorado Springs.
The first loan recipient of this program is Ernest and Jackie Williams, who received a $31,500 loan to start and operate Williams Soul Food. After being unable to secure a loan through various other avenues, they preserved and kept working hard until they were able to get a loan from CEF to purchase a food truck and trailer. Although they originally planned to open a storefront, the pandemic altered their plans into a successful mobile food business that offers lunch and dinner delivery that includes a catering service and sells specialty food items such as homemade smoked sausage and homemade boudin. With the assistance of this loan, they have been able to leverage their extensive experience into a viable business that support their family and benefit the wider Colorado Springs community. “We would not be where we are today without the help of CEF and their staff,” says co-owner Jacki Williams. “They never gave up on us, and when we ran into challenges, they helped us come up with solutions. They were truly with us every step of the way. We’re already planning an expansion, whether it’s a brick-and-mortar restaurant or another food truck.”
Founded in 1976, Colorado Enterprise Fund (CEF) provides loans up to $1M to finance small businesses and startups unable to obtain funding through traditional banks. CEF has disbursed more than 3,649 loans totaling more than $123M in startup and growth capital and created or retained over 27,585 jobs in the state. A nonprofit Community Development Financial Institution (CDFI), CEF is based in Denver with lending services available statewide.
CEF makes a positive impact on Colorado’s economy by accelerating community prosperity through its financing and support of entrepreneurs and small businesses across the state.
For more information, visit: www.coloradoenterprisefund.org
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