Character Counts for Loan Support from the Community-Managed BIPOC Loan Fund

Part of the IMPACT Stories series by State of Black Arizona.

The impact of alternative financing opportunities and capital access for small businesses

Keneshia Raymond builds businesses for a living. Thirteen years of working in her own businesses (in the wedding industry, tech, education, etc.) and with other entities helping early-stage entrepreneurs and fundraising for startups have made her an entrepreneurship maven. Now she leads the BIPOC Loan Fund, in addition to serving as Director of Programs and Access to Capital at StartUp Tucson.

Community Investment Corporation, a Tucson nonprofit expanding economic opportunities and alternative business financing, originated the BIPOC Loan Fund in response to the demands of the pandemic and George Floyd’s death. CIC’s pilot lent to 17 businesses through a community-managed, character-based process that contrasted sharply with traditional practices.

“We will continue emphasizing the importance of access to capital for micro to small businesses, the lack of which is a barrier to entry in the conversion of great business ideas into reality." - State of Black Business Report, 2023

Keneshia served on CIC’s leadership committee and is now heading up an expansion into metro Phoenix and Yavapai County. Growth Partners Arizona, a statewide community development funding institution, has provided resources to support the BIPOC Loan Fund beyond southern Arizona. Applications have been opened for the Phoenix metro program. Two new community representatives have been added to the committee also.

Business loan decisions are usually based first on financial details. Instead, character-based lending focuses initially on getting to know the applicant. The committee overseeing the lending also reflects the community and represents its interests. Those two facets make a difference, because no one wants to let down their community, and many have the capacity to be strong business owners even if they lack the typical financial wherewithal.

The process gets to the financial details soon enough, but it starts with who the owner is and why they are in business. As Keneshia says, “business is hard.” Understanding the entrepreneur’s “why” facilitates the decision-making process and provides a critical support if the going gets tough.

Decision makers for the BIPOC Loan Fund have “kitchen table” conversations via VideoAsk with potential borrowers. In Keneshia’s experience, the business outcomes are different—and often better— when the answer is “yes” or “not yet” rather than “no.” Those hearing “not yet” can be supported with “how can we help you.”

The BIPOC Loan fund is a new way of increasing access to capital for Black-owned and other businesses. After approval for loans from $500-$10,000 without fees and with sufficient time to repay, each business becomes part of a revolving loan fund. Thus, the fund continues to grow through both leaders’ fundraising and entrepreneurs’ paybacks. Scores of businesses from marketing and photography to bakeries, senior living homes, media, and more are now enhancing the fund that they benefited from.Keneshia emphasized also the role the community plays in championing the fund’s Black-owned businesses and others. Customers and promoters are essential to the long-term success of not just the BIPOC Loan Fund and its recipients but also to communities’ economies. Each and every person in the community makes a difference.

Learn more about the BIPOC Loan Fund.