Verity CU works with Flex Fund to provide flexible working capital loans.
Small businesses are the heartbeat of our communities, providing localized services and responding to needs felt uniquely by people like them. That’s why it’s so important to us at Verity Credit Union to make sure we’re reaching the community we strive to serve in all ways possible. This fall, our mission led us to pursue a partnership with Small Business Flex Fund, a new resource established and supported by the Washington State Department of Commerce to help small businesses and nonprofits access the financial support they need to thrive.
Flex Fund enables small businesses and nonprofits to borrow up to $150,000. The money can be spent flexibly, including on payroll, utilities and rent, supplies, marketing and advertising, building improvements or repairs, and other business expenses. Flexible working capital loans with low-interest rates and a long, 60-month repayment timeline are essential components for small businesses as they seek to grow, adapt and compete.
Participation in the Flex Fund deeply aligned with our growing membership needs and supported our larger strategy of helping more businesses and nonprofits throughout the Northwest, especially small businesses owned by women and BIPOC (black, Indigenous and people of color) community members.
In addition to receiving the Flex Fund loan, these businesses and organizations will benefit from Verity-specific offerings tailored just for them. This includes ACH and payroll services, cash management services, business credit cards for owners and their teams, building needs like commercial real estate loans and auto loans, and planning and business counseling. Our team is deeply involved in new member onboarding to ensure prosperity is the outcome.
A small business Verity team member will sit and discuss plans for the next three to five years with the business owner or owners and how Verity can help fill gaps and support them. The Flex Fund creates an introduction that leads to membership and a relationship of learning, coaching and giving.
Diversity Is Important to Us
The selection process for the fund was a simple application, resulting in a handful of financial institutions, including us, being selected. We chose to apply because we receive a lot of inquiries for flexible business loans, and Flex Fund provided a new solution to meet the dynamic needs of our members. The due diligence process for joining Flex Fund took about two months, allowing us to go live this October. To date, we’ve received 11 inquiries, and of these, we anticipate that two businesses will likely go on to the application process.
A crucial step to being able to apply was gaining Community Development Financial Institution certification, joining a network of like-minded, mission-driven institutions that serve and empower economically distressed communities. This designation led the way for us to better serve our expanded membership base, particularly those in low-income demographics.
As part of Flex Fund, we joined five other community lenders who are originating the loans: Ascendus, Business Impact NW, Craft3, Evergreen Business Capital Community Finance, and the National Development Council’s Community Impact Loan Fund. As of September, almost $45 million in loans with fixed, low-interest rates of 3% and 4% were available for eligible small businesses and nonprofits.
We welcome all inquiries and applicants in Washington State. Non-members can apply too and seamlessly become members as part of the application process. We anticipate this program will bring us aligned candidates and serve as a gateway and resource. After the loan is originated, it’s sold to minimize the impact on the lender. We view the process as an opportunity to develop relationships and cross-sell other products that we know will serve businesses and nonprofits well. Our main goal of joining the program is to bolster our mission of serving nonprofits and underserved, BIPOC and women-owned businesses.
Measuring success is simple for us: It’s being able to provide capital to those we seek to reach. Whether we give one loan or 10, we’re supporting a bigger initiative to build relationships, support businesses making a positive impact and deepen our connection to the community.
For credit unions, programs like these can be a catalyst for reaching those often underserved by financial institutions and a way to expand and grow their membership demographics. We’ve been grateful for the support of Joe Adamack at GoWest.org, who makes important introductions such as this one.
CUES member Tina Narron is chief lending officer at $1.1 billion Verity Credit Union, Seattle and board advisory member of the Washington Women’s Business Center.