Happy Sunday, friends. Today I want to share a playbook released by our friends at Access Ventures about their character-based lending Growth Loan Playbook. If you’re interested in building a funding structure that doesn’t rely on traditional measures (e.g., personal credit scores) to make good lending decisions for SMEs in your community (or globally), this is a must-read.

The playbook is great; dig in to learn how Access Ventures partnered with several friends of RBFN (The Kauffman Foundation, AltCap, and more) to make growth loans available to small businesses. 

The notion that traditional debt financing is generally unavailable to SMEs, and in particular to woman- and BIPOC-led SMEs is not new to this group; we all know that story, and we all know that it is a massive problem. That’s what makes this group so special though; you all know that this is a problem, and then you do something about it. 

Enter Bryce Butler and Access Ventures. They knew well that “the credit score has become a convenient number that banks are able to hide behind as they decline loans to qualified, hardworking, well-intentioned potential borrowers.” So, they developed an alternative approach to qualifying well-intentioned borrowers in partnership with SBDC, Kauffman, AltCap, and more. As they tested their ideas, they quickly discovered some of the obstacles to scaling their idea. For example, they learned that they would need to develop their own application system, so they did just that. 

The playbook shares not just the building blocks, the roadmap, and the path to building this program. It also shares their impact: they deployed $1M to 37 SMEs, created 130 jobs, and have seen a repayment rate of 89%. That’s really impressive, and demonstrates the kind of impact a well-designed loan program, focused on underserved communities and entrepreneurs, can have. 

Imagine the impact possible if communities across the country took this playbook and deployed it into their small business economy. I encourage you to take a look at the playbook. Even if you’re not working on a loan program like this, you’ll likely learn something new that you can incorporate into your approach to funding entrepreneurs.