BALTIMORE – Lower-income Baltimore neighborhoods and small businesses are getting a boost from a loan program that's tailored to their needs.
The Baltimore Community Foundation's impact investing program has brought almost $4 million to local businesses and organizations in the past year.
The program, called Invest for More, serves as a source of capital to help minority-owned businesses gain betters access to small business loans and capital, which can be difficult to find.
Patricia Baum, who serves on the foundation’s board, says it looks to work with lending groups that support local neighborhoods.
"One of the things we're doing is a bridge loan to a group called Healthy Neighborhoods, which they go in and try to make homes that are in blighted neighborhoods safer and allergy free," she states.
Baum says impact investing is a growing trend, as investment groups want their money to have a positive social impact.
The Baltimore Community Foundation commits up to 4% of its invested assets of its $148 million endowment to an investment pool dedicated to supporting economic growth in the Baltimore region.
Bonnie Crockett, director of Baltimore Business Lending, which partners with the foundation, says many barriers exist for minority lending. If a minority or female-owned business wants to borrow more than $5,000, banks require collateral, which many small businesses don't have.
Crockett says an impact investment loan can change that picture, as was the case with a young Baltimore couple who had plans to open a wine shop.
"They had a little bit of equity in their house and they got a loan for everything, but it wasn't enough to cover the last of the refrigerators,” Crockett relates. “And they couldn't get any more funding because they were at the extent of their collateral. And we were able to lend them $15,000 that let them open their wine shop - and it's been a huge success ever since."
According to a report by the Global Impact Investing Network, impact investing around the world now totals $502 billion, much of it from the U.S. and Canada.
