The Greater New Haven Branch of the National Association of the Advancement of Colored People (NAACP) and First Niagara Bank have created a program to help the community obtain not only loans and mortgages, but most of all, they say, hope.
About 25 people gathered Wednesday morning at the Greater New Haven NAACP branch office at 545 Whalley Ave. to hear about the progress of the partnership’s $5.35 million Small Business Urban Loan Fund Program.
The new program gives eligible small-business owners the opportunity to obtain loans, provided by First Niagara, of up to $150,000, or microloans of up to $25,000.
James Rawlings (pictured), president of the New Haven NAACP, said the program has two goals: to challenge and address issues of the economic infrastructure within the area’s urban setting, and to bring hope to the streets of urban America.
First Niagara partnered with the branch in 2012 and pledged $7.5 million over five years in loans, mortgages and down-payment assistance for homebuyers.
“What this partnership is about, beyond the dollars, is bringing hope to each and every person in our streets, who feel that they’re left out of the American dream, who have lost their homes through economic downturn, who are challenged in the education system, who have all the challenges that we know about,” said Rawlings.
Rawlings said he hopes the community will realize that the small business loan program will bring economic equity and can help them move forward in their lives. The program is different from traditional loan programs, he said, because it’s sensitive to the community’s needs.
“Credit scores and other, what we would call, barriers to access to dollars have been softened,” said Rawlings. “Under the old formula, they [small business loans or microloans] were not as approachable as they are under this new program. Sensitivity to our community needs is the important piece of the way this program has been developed.”
Applicants first pre-apply to be screened for eligibility by the NAACP Economic Development Committee. Next, applicants must submit a business plan that demonstrates the business objectives and financial viability. Finally, after NAACP’s screening, eligible applicants are referred to First Niagara Bank for credit underwriting.
In order to be eligible for the program, applicants must meet the following terms and conditions: create a positive impact on the Greater New Haven community through job creation or urban revitalization, demonstrate the ability to repay the loan and meet First Niagara’s underwriting criteria, and be located in one of the 14 communities serviced by the Greater New Haven NAACP.
Paul McCraven (pictured), senior vice president at First Niagara Bank, said the bank and NAACP worked together to come up with criteria that they considered fair, and would also “provide a second look at people who may not exactly fit into that criteria.” He said he is pleased with the final criteria.
McCraven said he is also pleased that a system was able to be set up in which the loan applications will go through a different channel so that applicants are given every opportunity to hopefully be approved.
“I think it’s great that the First Niagara Bank has agreed to minimize their underwriting criteria to make it easier to make some loans and put them on the streets,” said William Kilpatrick (at right in photo), chair of the NAACP Economic Development Committee and the retired city parking authority chief. “That will eventually make a difference in job creation and help revitalize New Haven and the surrounding communities.”
The small business loan program is part of a two-prong effort, the other prong being the NAACP and First Niagara’s mortgage program.
“I want to set the benchmark for the small business loan and microloan,” said Rawlings. “We already have in place a standard. The standard is the success of our mortgage program.”
Bridgette Russell, managing director of Neighborhood Housing Services of New Haven’s HomeOwnership Center, built the mortgage program in 12 months.
Russell reported that nine people have closed on mortgages, one person is cleared to close, and five others have been pre-approved and are still looking for properties.
“We have a host of others that we’re working with, and I’d say there’s probably a good 30 in that pipeline that are moving to the point where they can actually get that pre-approval,” said Russell.
The mortgage program has a homebuyer education component in which people are coached and counseled in terms of credit, savings and overall budgeting. The small business loan program will also provide applicants with assistance.
“We wanted to make sure that the program had the tools to be successful,” said Kilpatrick. “It was important that we had a system of program that could provide the technical assistance that’s needed, in many cases, for a loan applicant to be successful.”
Hartford Economic Development Corp. (HEDCO) will provide technical assistance for applicants to help ensure that their business and loan applications have a chance of being approved and succeeding. HEDCO has also be contracted for servicing and loan recommendations.
“This is something for our community — jobs, new businesses,” said Dori Dumas, first vice president of the New Haven NAACP. “We need you all to spread the word about this wonderful program that we think will benefit New Haven, our community, and therefore all of us.”
Rawlings said the program was put together in a way that makes it “portable.” He encouraged other NAACP branches to follow the New Haven Branch’s lead.
“We want other branches of the NAACP across the nation to partner with the banks in their communities and to have similar CRA [Community Reinvestment Acts] programs,” he said. “That’s the way it should be done.”