Community lending – Helping small businesses grow
Running a small business is a huge challenge. Even with the best-laid business plan and capital to spare, if you want to follow the long road to success you are going to need some help. Be it financial planning or access to skilled employees, a small business’ ability to leverage this help is critical to surviving and growing. We spent time with Prospect Cleaning Service to learn more about their experience working with the Excelsior Growth Fund (EGF), one of CNote’s CDFI partners.
EGF worked with Propsect’s owner, Ingrid Murray, to help her get her business positioned for sustained growth and financial success. Her story illustrates that CDFIs do a lot more than just cut a check for borrowers–they invest in their long-term success.
Taking the next step
Prospect Cleaning Service provides commercial cleaning services in the metro-New York region. In 2011, when Ingrid acquired Prospect from her husband, she already had excellent experience as its bookkeeper and office manager. What she needed, though, was guidance around business management, financial planning, and the company’s growth strategy.
A bump in the road
When Ingrid needed funding after taking over Prospect, online lenders offered easy applications and what seemed to be easy money. Unfortunately, easy access came at the price of high interest rates and unreasonable terms. Soon, Prospect was buried in debt, and responsible for $4,000 dollars a month in debt repayment – a huge burden for any small business. Instead of this onerous loan proving fatal, the EGF team helped turn this into a learning opportunity that made Ingrid a better business owner.
CDFIs, more than just a lender – the shared success model
Fortunately, Ingrid turned to Excelsior Growth Fund (EGF) when she hit this bump in the road. She ended up getting a lot more than financial assistance–EGF helped give her the tools for sustained growth.
To start, EGF offered Ingrid secure a debt-refinance deal that allowed her to reduce payments to only $451 a month. This decreased Prospect’s debt load gave the company the runway it needed to strategically grow. In the short run, EGF helped take a ton of financial pressure off of Prospect.
Almost more important than the loan, however, Ingrid found help and guidance from the EGF team critical in navigating her growth strategy and planning for a sustainable future.
Shortly after receiving the loan, Ingrid won consecutive contracts for snow removal with the City of New York and for a major national drugstore chain. Despite her experience, Ingrid was having trouble working out her growth plan and she needed to hire additional staff. The EGF team worked with her one-on-one to analyze the contracts and build out cash flow projections that would ensure Prospect Cleaning remained in solvent throughout this rapid growth period.
“EGF team taught me to look for funding to plan for growth. If I did that before, I would have been in a better financial position and not felt pressured to work with a predatory lender,” says Ingrid.
EGF & Prospect, the partnership continues to pay off
Through the business assessment conducted for Ingrid, the EGF team also identified another significant opportunity to drive business growth – creating a new brand and digital marketing plan.
As a result, EGF secured a consultant through the EGF Consulting Corps—at no cost to Ingrid—to improve Prospect Cleaning Service’s website and launch a digital marketing strategy.
With an eye to the future, Ingrid is well positioned to maintain Prospect’s growth trajectory.
This story illustrates just how dedicated CDFIs like EGF are to their borrowers. They align their fortunes, quite literally, and they want every borrower to succeed. This story shows us that many of these community investments are investments in people more than they are in businesses. What a great investment to make.
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