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E-Community Loan Fund: The Trojan Horse

By: Erik Pedersen

Erik Pedersen

"The E-Community loan funds are the Trojan horse - they give us a seat on the bus with the E-Community leadership team to talk about initiatives that can help businesses start, expand and transition. (Inside joke but Simone Elder will be proud I used "on the bus" instead of "at the table").

I must have said that line a thousand times last year followed by talking about "working at a level deeper than the money", "strategic planning with the leadership team" and "bringing programs to the community and/or experimenting with pilot ideas".  Sometimes I find myself downplaying the importance of the loan fund as I brag about the innovative things being done by the leadership teams.  However, three weeks ago, I was working on a presentation for the Central Region E-Community Retreat in Marion, and, as I prepared my slides, these numbers jumped out at me.  Check these out!


Since inception there have been 430 loans totaling $12.26M (thru 11/30/17) 

•       EOY ‘16 – 347 loans, $9.01M
•       EOY ’15 – 282 loans, $7.19M
•       EOY ‘14 – 226, loans, $5.52M
•       EOY ‘ 13 – 181 loans, $4.23M
•       EOY ‘12 – 121 loans, $2.51M
•       EOY ‘ 11 – 76 loans, $1.59M
•       EOY ‘ 10 – 37 loans, $901K

430 loans totaling $12.26M, to 414 businesses (as of 11/30/17)
•       17% of total loan package
•       Leveraged $58.3M other capital (bank loans, RLF, etc.)
•       49% in towns with population <5K (12% of those <1K)
•       46% startups, 35% expansions, 15% purchase
•       27% retail, 21% restaurant, 5% manufacturing, 47% service
•       12% business failure rate (49 of 414 businesses. 15 of the 49 still paying)
•       16% of loans paid in full (69 of 430 loans)


How in the world could I downplay the importance of that?  In fact, I should actually highlight a few of the numbers:

*In the first 11 months of 2017, there were 83 loans approved.  That’s roughly 20% of the total loan activity since E-Community started in 2007.

*In the first 11 months of 2017, E-Community loans totaled $3.25M.  That’s just slightly less than the previous two years combined.  The average loan is only $39,000 so reaching $3.25M means there is high volume; 35 of the 59 E-Communities approved at least one loan.

* The E-Community funds are only 17% of all the money in the 430 loans.  There is another $58.3M of bank loans, city/county revolving loan funds, microloans, USDA, etc. (Note: I’ve always said that in a well-functioning E-Community, the banks play a key role.  The bank is where an entrepreneur is going to start their search for money, and they should.  When the bank knows this loan fund exists, and that it does not compete with them but instead sits at the end of the capital food chain, to assist when they need it, that’s when it works well).

*46% startups, 35% expansions, 27% restaurant, 21% retail, 49% in towns with populations under 5K (with 12% in towns under 1K).  The loan funds are being used to positively affect many important, and often underfunded, businesses.

I remember back to the Shawnee County E-Community lenders roundtable, held at Glaciers Edge Winery, when one of the bankers said “when I hear all of those loan usage stats, I realize that this E-Community Partnership we just became a part of is making a huge difference in rural Kansas."  What a wonderful testament to hear.  

Glaciers Edge1

Come to think of it, I still have the bottle of Catawba wine I bought that day at Glaciers Edge. People say I take my work home with me…that’s not always bad.

Glaciers Edge2

Happy New Year!