SAN JOSE, Calif.–The small business microlender Opportunity Fund said it is teaming up with three credit unions as part of its bid to invest $1 billion in “marginalized businesses” across the country over the next two years.
The three credit unions partnering with Opportunity Fund are the $1.8-billion Meriwest CU in San Jose, Calif.;, the $1.5-billion Self-Help FCU in Durham, N.C. (but with California operations), and the $272-million UMe Credit Union in Burbank, Calif.
Opportunity Fund said the partnership will increase small business owners' access to transparent, affordable credit — particularly among businesses owned by women, people of color and rural entrepreneurs — “allowing credit unions to confidently refer members to the nonprofit lender to meet their business credit needs responsibly while retaining the overall banking relationship.”
"Credit unions and Community Development Financial Institutions like Opportunity Fund share a purpose: to ensure ready access to affordable, responsible, financial products and services in our communities," said Luz Urrutia, CEO of Accion Opportunity Fund, in a statement. "By working together, we can build a more inclusive financial landscape, especially for women, immigrant and entrepreneurs of color.”
Working Capital Loans
The credit unions are partnering with Opportunity Fund to provide working capital loans from $2,600 to $100,000 to underserved businesses, with flexible underwriting criteria, less “onerous” documentation requirements than other lenders, and multilingual customer service representatives available to answer questions 7 days a week/12 hours per day.
"Creating and protecting ownership and economic opportunity for all is at the heart of what we do at Self-Help FCU,” said Sarah Brennan, SVP of Southern California for Self-Help FCU. “By collaborating with Opportunity Fund, we refer members for small business loans we don't offer in-branch, ensuring that whether it's us or our trusted partner Opportunity Fund, we can support entrepreneurs — especially entrepreneurs of color, women, and immigrant business owners — in making their dreams a reality.”
Pilot Program Results
Opportunity Fund reported that during a pilot program to test the “CDFI + Credit Union” partnership model in the eight months prior to the COVID-19 pandemic (July 2019 - Feb 2020), nearly 90% of the small businesses backed by Opportunity Fund were women, immigrant, or minority-owned.