Unique Credit Union Partnership Helps Launch Underserved Businesses in Washington
Three credit unions partner with state and public agencies to make $750,000 in loans available to diverse businesses participating in a state mentorship program.
A unique partnership—formed between three Washington credit unions, the Washington State Department of Transportation, and Sound Transit—is helping new, diverse businesses obtain financing to launch and secure state transportation contracts.
The mentorship program has been operating successfully since July 2018; however, access to capital continued to be a primary barrier to small businesses and those owned by minorities, veterans, and women.
To address this need, Verity Credit Union, BECU, and Harborstone Credit Union are jointly making $750,000 in loans available to support Washington’s underserved businesses participating in WSDOT’s Capacity Building Mentorship program, which works to foster partnerships between large businesses and new diverse businesses working in construction and transportation. Program mentors provide technical assistance and business advice to strengthen each mentees’ capacity to work with WSDOT and Sound Transit.
Business Impact NW, or BIN, is a nonprofit 501(c)(3) organization and community development financial institution that is administering the loans through the mentorship program. It coordinates with the DOT and helps the businesses get up to speed on transportation contracts.
Each of the three credit unions is a strong supporter of BIN and have representatives on BIN’s board.
“The credit unions committed $250,000 each to support the capital side of the program,” said BIN Executive Director Joe Sky-Tucker. “They are committed to working with small businesses and have been for years. We’re working to put the credit unions front and center,” said Sky-Tucker. “We wouldn’t be able to do what we do without their support.”
Harborstone was instrumental in the formation of BIN. In addition to providing loan funds for the mentorship program, the credit union maintains a Micro-Lending Fund Credit Union Service Organization that provides capital for BIN loans.
“Harborstone believes in promoting long–term positive economic change for low– and moderate–income business owners through access to capital,” said Harborstone Vice President of Community Development, Mark Minickiello. “That’s why we helped start BIN and the Micro-Lending Fund CUSO; we’re excited about this new partnership and hopeful it will have a positive impact.”
Since news of the program’s capitalization became public, BIN has already started to receive referrals.
“We’re just launching the capital portion just now,” said Sky-Tucker. “We haven’t done any loans yet, but a possible scenario could be that we administer 15 to 20 loans over the next 12 months.”
BIN is dedicated to serving under-banked entrepreneurs at every stage of growth by providing access to capital and comprehensive technical assistance, including financial services, business advice, and training.
“We’re always looking for other credit unions to join the CDFI and support BIN,” said Sky-Tucker. “We’re not a depository; we need support.”