The new Colorado Startup Loan Fund was announced on Wednesday by the Polis Administration and the Business Funding & Incentives Division of the Colorado Office of Economic Development and International Trade (OEDIT).
It introduces new financing options for small business owners across Colorado looking to start, restart, or restructure a business. The Fund will focus on serving business owners who have historically encountered barriers to bank financing so they can start and grow the types of thriving businesses that make up the heart of the Colorado economy and communities.
“As a Coloradan who knows what it’s like to start and run a business, I am committed to supporting entrepreneurs in Colorado and providing commonsense help to save people and businesses money,” said Governor Jared Polis. “The Colorado Startup Loan Fund is an exciting new opportunity that will help entrepreneurs transform their idea into reality and create the next generation of great jobs in Colorado.”
OEDIT is partnering with eight lenders to implement the Colorado Startup Loan Fund and provide loans under $150,000 and microloans to small business owners and entrepreneurs all across Colorado. By offering smaller-than-average loans with favorable terms and interest rates, the program seeks to make financing a possibility for entrepreneurs who might not qualify for or require a larger loan.
These lenders have been selected for their abilities to work with business owners who are located in rural areas, may not be English-speakers, have never carried a loan, lack the traditional assets required to secure financing, or have been previously unable to obtain a loan.
Open for business. Photo by Álvaro Serrano on Unsplash
“Great business ideas can be found across Colorado in communities of all sizes and demographics. By making small business financing more widely available to owners who have experienced diminished access to funding, we can help the entire state thrive and strengthen our economy as a whole,” said Patrick Meyers, OEDIT Executive Director.
“Small business owners add so much vibrancy to Colorado communities. They bring us new options for eating out by starting food trucks, developing new lifestyle or gaming apps, or starting the salon that becomes a community favorite. The Colorado Startup Loan Fund will help under-resourced entrepreneurs obtain financing that they can use to launch their business and feel more financially stable as they establish and grow their revenue,” said Jeff Kraft, Director of OEDIT’s Business Funding & Incentives Division.
The Colorado Startup Loan Fund was established by HB21-1288, which was sponsored by Colorado Reps. Jennifer Bacon and Monica Duran, as well as Sen. James Coleman. The bill recognized that the business landscape had changed as a result of the COVID-19 pandemic and many entrepreneurs who filed for bankruptcy or closed their doors due to the pandemic may be prevented from reentering the market due to low credit scores or other pandemic-related financial impacts. This fund supports the creation of new businesses and the restructuring of existing businesses to operate in today’s market.
“We know that 1.2 million Coloradans work for small businesses, which represents 48 percent of all Colorado employees,” said Bacon. “I am grateful to my colleagues for their support in passing such an important bill and establishing the Colorado Startup Loan Fund, which will help ensure that small businesses continue to be strong employers in our state.”
“Approximately 70 percent of small business owners in Colorado are women, veterans, Black, Hispanic or other racial minorities. I’m proud to have helped pass HB21-1288. By supporting small business owners, the Colorado Startup Loan Fund will play a key role in supporting business owners who may have experienced obstacles to financing in the past,” said Duran.
“Small businesses employment growth in Colorado has outpaced the national growth rate,” said Coleman. “In some sectors, such as construction, healthcare and retail, small businesses also make up the majority of employers, proving once again that small businesses are at the heart of the Colorado economy. It was an honor to sponsor this bill with my colleagues.”
The Fund will be managed as a revolving loan fund, with the intention of creating evergreen funds where each dollar provides for multiple loans over the course of many years. The eight lenders selected to participate in the Fund are:
- B:Side Fund
- Colorado Enterprise Fund
- Community Enterprise Development Services (CEDS Finance)
- Exponential Impact (XI)
- First Southwest Community Fund
- Lendistry
- Region 9 Economic Development District
- Rocky Mountain MicroFinance Institute
A total of $31.35 million in funding is available through the Colorado Startup Loan Fund. Business owners who are interested in the program can visit https://oedit.colorado.gov/colorado-startup-loan-fund for more information.