By Tony Gavin
Commercial Loan Officer and Community Reinvestment Act Officer
Owning a business takes skill and guts . . . .as well as some capital. Capital often requires a bank loan, and when you don’t have a credit history or have a poor credit history, a bank loan can be hard to come by. As a result, many would-be business owners never get the chance to see their dreams of owning businesses materialize.
The city of Springfield is taking part in a micro-lending program aimed at helping entrepreneurs who don’t have the credit to get a conventional bank loan. And INB is stepping in to help as one of eight banks funding the $1.7 million loan program. Springfield’s Community Development Block Grant is providing $25,000. Justine Petersen CEO Robert Doyle said he’s hopeful other Springfield institutions and individuals will contribute as he expects it won’t take long use up the program’s funds.
The program, called the Springfield Area Microloan Fund, is facilitated by Justine Petersen, a St. Louis-based, community-lending organization. One of the group’s members will work out of the City of Springfield’s Office of Planning and Economic Development.
It’s exciting for INB to take part in something that allows our money to be used for very small loans. The individuals who get the money can’t get loans the conventional way because they don’t have the money for a down payment, or they have no credit scores or poor credit scores. Justine Petersen is willing to work with these loan recipients to educate them on the importance of credit score and how they can improve their credit. Over time, they’ll be able to seek traditional bank lending as their businesses grow.
City officials say the fund saw six loan applications on the first day. Mayor Jim Langfelder took the opportunity of a news conference to emphasize: “It’s not a giveaway program, it’s a loan program.”
Much of Justine Petersen’s work to this point has been in the St. Louis and Kansas City metropolitan areas, and the establishment of the loan fund in Springfield marks a new focus in Central Illinois, according to Doyle.
INB chose to be a part of this because it’s good for the community. We’ll soon have more businesses being started and, down the road, we’ll have more people being able to bank with us because their credit scores will improve.