Spokane Journal of Business

SNAP commercial loan volume on track for record year

Organization hasn’t recorded any defaults in past two years,financial stability director says

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Increased demand for financial assistance at SNAP Financial Access led to a record $1.1 million in loans last year. 

This year, another record volume is within reach, says Karen Campbell, the organization’s director of financial stability.

Year to date, SNAP Financial Access has issued about $700,000 in loans to 14 businesses, she says. An additional $100,000 has been approved and will be funded by year-end. 

“And we have in our pipeline enough so that I can confidently say that we’ll either meet or exceed our lending goal last year, this year,” Campbell adds.

SNAP Financial Access is a community development financial institution, or CDFI, that provides technical and financial assistance to small businesses and startups, most of which are located in Spokane County, with some assistance available for other Eastern Washington businesses as well.

SNAP Financial Access is a division of Spokane Neighborhood Action Partners that offers technical assistance through business development classes, workshops, and one-on-one coaching, in addition to financing opportunities.

“What we’re trying to do is build capacity in people who have never borrowed money before, or started a business before, through the technical assistance programs that we offer. We continue the technical assistance through the life of the loan to ensure that our borrowers are successful,” Campbell says. “It’s just good business sense to make sure that we’ll be repaid so we can lend it out to the community in perpetuity. That’s our goal as a CDFI.”

Small business loans range from $500 to $150,000; Campbell explains.

She says the average loan amount through the first 10 months of 2022 is about $46,000, which equals the average loan size last year.

Loans funded so far this year range from about $20,000 to about $140,000 and loan terms typically last 36 to 60 months, she says.

Campbell says she’s noticed rising interest rates have impacted business lending requests, and businesses are prioritizing equipment purchases that could increase income.

She says the current interest rates vary significantly depending on the loan program. 

No defaults have been reported at SNAP this year and last year, which Campbell says is well below CDFI allowable standards.

She attributes the zero-default rate to SNAP’s default mitigation assistance and funding from the federal coronavirus relief package known as the CARES Act.

“All of our clients who had existing (U.S. Small Business Association-backed) microloans in 2020 and 2021 received additional payments from SBA on their behalf as part of the CARES funding. So, it not only stabilized our borrowers, it also stabilized our portfolio as an SBA microlender.”

Campbell says that was a significant help, with some businesses receiving assistance for six months or longer.

Instead of borrowers making loan payments to SNAP, she says the SBA made loan payments, which allowed the borrowers to reinvest in their businesses to survive the pandemic.

“It was a stroke of brilliance that I didn’t see coming and it really made a huge difference,” she says.

Campbell says one of SNAP’s priorities is to help businesses become bankable through traditional banking sources. She says a business that goes through SNAP for financial assistance can show traditional lenders that the company can make repayments.

She says lenders also consider the other assistance SNAP provides to businesses.

“We’ve also built systems and given them support to be successful, which I think is attractive to traditional banking sources,” she says.

SNAP helps build navigable and useful accounting systems for companies and helps create a web presence and online payment portals for businesses, both of which will help strengthen the business’s loan request with a bank.

Campbell says that SNAP’s assistance can also help increase the likelihood for a new business to secure a lease with a landlord.

“If the property owner is unfamiliar with them, just knowing they’re getting technical assistance from SNAP and a loan from us can help strengthen their chances of their proposals when they want to sign a lease, because the landlord knows we’ll be there every step of the way,” she says.

Campbell says SNAP doesn’t provide assistance on its own. The nonprofit also relies on partnerships with the Northwest Business Development Association, the SBA, the Washington Small Business Development Center, the city of Spokane, and Spokane County for referrals, some sources of capital funding, and for programmatic needs.

“We need everybody pulling in the same direction on this initiative to be a community development financial institution,” she explains.

Businesses sometimes turn to SNAP for financial assistance more than once. Campbell says startups typically have difficulty obtaining traditional financing and, in that case, SNAP could provide an additional loan.

“It might be in an industry that traditional banking sources don’t want to fund,” she says. “They might still have some impairment on their credit score, so they’ll come back to us. Especially for SBA microloans, if they’ve been turned down by a bank, we’ll consider them for a loan.”

Campbell says SNAP can help through every stage of the business plan.

“If you’re not ready to borrow, we help you get ready. When you’re ready to borrow, we’re here,” she says. “And through the life of the loan, we’re available for support services and technical assistance so that you’re successful.”

In addition to offering financial and technical assistance for small businesses and startups through SNAP Financial Access, Spokane Neighborhood Action Partners provides affordable housing; assistance for down payments, energy, and essential home repairs; home and foreclosure prevention loans; education and counseling for home buyers and energy conservation; homelessness outreach, and the Women’s Business Center, which offers business consulting, training, and financing.

Erica Bullock
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Reporter Erica Bullock has worked at the Journal since 2019 and covers real estate and construction. She is a craft beer enthusiast, who loves to garden and go camping with friends.

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