It’s a sunny Saturday morning in late March, and Yanush Sanmugaraja is standing before fewer than a dozen curious entrepreneurs on Buffalo’s East Side, explaining the importance of cash flow.
Sanmugaraja is an economic development director for the Westminster Economic Development Initiative, Inc. on Grant Street. Events like this make up the bulk of WEDI’s week-to-week community outreach programs.
For alternative lending and community development financial institutions in Buffalo, programs like the recently completed “Filling the Finance Gap” two-part series are an enormously important part of how they find potential small business entrepreneurs who may have a strong work ethic and solid business plan, but no way to secure financing.
These events, Sanmugaraja said, may not have an attendance of more than three to five entrepreneurs. But establishing relationships, he said, particularly in underserved populations on Buffalo’s East and West sides, is fundamental to developing a healthy small business ecosystem in those neighborhoods.
For local CDFIs and alternative lending agencies, the “Filling the Finance Gap” series was an opportunity to pool resources and work together in reaching potential clients. The series included participation from WEDI, PathStone Enterprise Center, Erie County IDA, and Excelsior Growth Fund.
“We want to show how financing can help you turn around your business,” Sanmugaraja said. “So that's really the job of our outreach. To be out in the community, show people that we’re here to meet their needs, learn what their goals are, and learn how they're doing and find ways to help them.”
Sanmugaraja said that just from the two events, the first held in February at the Beverly Gray Business Center and the second in March at the Community Action Organization, WEDI met five clients with whom it is now working. One client from the second workshop, Sanmugaraja said, was just approved for their first loan.
But not all loan agencies are the same. From Erie County IDA to traditional banks, the size and scope of loans differ. A large part of the “Filling the Finance Gap” series was to lay out what each agency does specifically, and who might be the best candidate for that organization.
“Right now, we’re trying to support small businesses and support our partners,” said Beth O’Keefe, a business development officer at Erie County IDA. “All these different organizations are doing different kinds of outreach on their own. The whole goal was to put efforts into collaboration, lower costs and time by working together, and hopefully, build on something there.”
Erie County IDA primarily specializes in maximizing tax incentives and providing larger loans within targeted industries, as well as smaller microloans to qualified businesses. O’Keefe said that at one time, there were limited microloan and CDFI agencies in Buffalo, and it primarily came from the City of Buffalo and the IDA. Today, the microloan community locally is not only more prevalent, but also working together in collaboration.
“I think, the people that I spoke to, they didn’t know what a CDFI was,” Sherri Falck of Excelsior Growth Fund said. “People I talked to at the event and leading up to the event were eager to have that information, and that was the whole purpose, to share information and raise visibility of who we are and what we do.”
Excelsior Growth Fund also does webinars and small business seminar series throughout the year. EGF’s next event is a webinar on how to apply for a small business loan, hosted by the Women’s Business Center at Canisius College May 31 from 2 to 2:45 p.m. More information can be found at https://pages.excelsiorgrowthfund.org/access-capital-part2/?utm_source=EventsPage&utm_medium=EGFWebsite&utm_campaign=Buffalo2
On Thursday, May 3, WEDI is hosting its own workshop on the importance of record keeping at West Side Community Services. Visit http://www.wedibuffalo.org/ or call 716-393-4088 for more information.
As the weather grows nicer, bringing the community together from outside grows more difficult and attendance tends to drop. But Buffalo’s CDFIs are considering what’s next for another collaborative lending series in the fall.
“A lot of business owners, especially in Buffalo’s refugee communities, won’t explore the possibility of financing, in part because of the assumption that they won’t get financing from traditional sources,” Sanmugaraja said. “They won’t even reach out. And that interpretation is obviously completely incorrect. (As) alternative lenders, our goal really is to help people increase sales and revenue. We want to see how financing can help you turn around your business. So that’s really the job of our outreach."