Clackamas Credit Union Launches Small-Business Loan Program
The credit union teams up with Oregon City to provide micro loans to start-ups.
Clackamas Federal Credit Union started taking applications Monday for a pilot micro-loan program to help launch businesses in Oregon City, Ore.
Clackamas ($616.6 million in assets, 35,338 members), is based in Oregon City, 13 miles south of Portland. The credit union teamed up with Oregon City officials and Micro Enterprise Services of Oregon (MESO) earlier this year to devise the Entrepreneurial Opportunity Loan Program.
This public-private partnership was designed to “boost the local economy and provide much needed ‘patient-capital’ to startup firms in Oregon City,” a Clackamas news release said.
Business owners who have been in operation for up to three years may apply for loans up to $20,000 from Aug. 15 until Sept. 30. The program will lend a total of $100,000 in 2022, half of the amount provided by Clackamas.
“The Entrepreneurial Opportunity Loan Program fits very well with the mission of the Clackamas Federal Credit Union,” Katie Gillespie, director of business services for Clackamas FCU, said. “The hope and goal is that we can demonstrate it’s successful so we can continue offering it.”
To be eligible, a business must be in Oregon City, have a business plan and provide a personal guarantee.
Borrowers selected to participate will not have to make principal or interest payments until after 12 months. During the first year, interest will accrue at a rate of only 0.5%, and after 12 months the interest will be adjusted to 3 points above prime. Borrowers will have up to five years to repay the loan.
MESO, a Portland-based non-profit, will provide technical business development assistance to companies interested in the program, including business planning, market research and help with the loan application itself.
Executive Director Cobi Lewis said MESO’s mission is to “elevate and empower historically excluded and under-resourced entrepreneurs with tailored assistance and flexible capital to build family wealth through small business ownership.”
“Access to equitable capital is critical to the success of start-up businesses, which is why MESO is excited to be a part of this project,” Lewis said.
Last year, Clackamas produced $12.4 million in commercial loans, or 6% of its total originations.
It originated $7.4 million in real-estate-backed commercial loans, or an average of $568,150 for the 13 loans. Commercial loans not backed by real estate were nearly $5 million, or an average of $160,204 for the 31 loans.
In this year’s first half, commercial loans accounted for 11% of total originations. Real estate-backed loans rose nearly five-fold to $10.9 million, while non-real estate commercial loans fell 98% to $1.7 million.