During our in-depth interview with the Utah Microloan Fund, we had the privilege of exploring a wide range of their innovative strategies for effectively reaching and serving rural communities. In this article, we present their valuable insights, knowledge, and responses, shedding light on the Fund's efforts to empower entrepreneurs in rural areas. Check out some of the key challenges they face, the tailored solutions they provide, and the major impact of their services on businesses in these underserved regions to build community.
Q: How do you go about making your services known and accessible to rural communities?
A: To make our services known we frequently attend virtual and in-person seminars with chambers and economic groups, as well as the Small Business Administration’s Rural Roadshows where they set up resource fairs for small business owners in rural areas around the state.
Online we implement targeted social media and Google ads in those areas so we show up in searches and on people’s natural browsing patterns when looking for resources for their business.
This has been a huge help not only for our rural clients but also for keeping businesses safe and funded during the pandemic. Our credit committee sessions where the client presents their business and why they would like the loan are held virtually as needed. We also offer a wide variety of classes in our online library and virtual classes such as our hiring series.
Q: What are some unique challenges to lending to businesses in rural communities?
A: Our biggest challenge is small business owners being aware of our services. We are a state-wide organization as of 2017 but are still headquartered in Salt Lake City so we have to try extra hard to let our services be known throughout the 29 counties in our state.
Q: What do businesses in rural communities particularly need in terms of capital/financing?
A: For us, this is different client to client. We have some clients who are looking for funding to buy/rent a space or make big equipment purchases. Others are looking to get their business started and need funding for working capital and getting their business off the ground. We have restaurants, artists, construction and trucking companies and more. It’s fun to see!
Q: Why are the services you offer so vital to rural communities?
A: It has been reported that one of Utah’s biggest challenges is the lack of economic opportunity in many rural communities. Leaders in community development are looking for increased coordination of state services, training, and funding. We are unique in that we will lend to startup businesses as well as those that are not “bankable” by traditional funding resources so we can be a last resort for many.
Q: What are some unique challenges with lending to minority-owned businesses and how do you address them?
A: One opportunity that can exist is a language barrier but we have hired interpreters for the applicants in the past, enabled our website so that it can be translated into Spanish with the click of a button, and invested in translation services of our important materials like our loan orientation.
For these communities, we also can struggle with outreach so we frequently join relevant chambers of commerce and strive to engage in both grassroots and online efforts to make our services known. This includes teaching classes about our services and pertinent topics for small business owners, and partnering with organizations to capitalize on each other’s marketing efforts.
Q: What do minority-owned businesses particularly need in terms of capital/financing?
A: Definitely access to it. According to a Deseret News article, results found that minorities make up for 22.3% of the state’s total population although just under 7% of Utah startups are owned by minorities. Nationwide, Utah came in with the 10th lowest percentage of minority-owned startups. “The first and foremost structural barrier for would-be minority entrepreneurs is access to capital,” wrote report author Lauren Bringle, an accredited financial counselor and content marketing manager with Self Financial. “Without upfront capital to invest in a growing business, minority entrepreneurs struggle to run and scale their operations.”
So we really want to bridge that gap for them and help make their business dreams a reality.
Q: Have you used any alternative underwriting methods to provide capital to minority-owned businesses?
A: If there is a language barrier we will work with an interpreter or a business advisor to get them where they need to be.
Q: If an institution is looking to expand the amount of lending they provide to minority-owned businesses, what would you recommend?
A: Coordinated outreach at a grassroots level. Meeting people where they are and strong partnerships with resource organizations like minority chambers of commerce, the International Rescue Committee, etc can help build awareness and trust in these communities which in turn can lead to more people seeking funding to start or grow their business.
Q: What are some unique challenges with lending to women-owned businesses and how do you address them?
A: Historically women have been lent to less by traditional means so they are also a part of the underserved population that we focus our attention on. We also try to connect them to other female entrepreneurs and mentors, especially through our partnership with the Women’s Business Center of Utah.
Q: What do women-owned businesses particularly need in terms of capital/financing?
A: According to a report by the Utah Women & Leadership Program, the three biggest barriers for women entrepreneurs in Utah included fair access to capital, insufficient federal contracting jobs, and access to specialized business counseling and training.
One of our big focuses is helping women business owners make their dreams a reality through funding and training, including our Banking on Women program. Our team is also members of groups like the Business Women’s Forum, Utah Women’s Networking Group, etc.
Q: If an institution is looking to expand the amount of lending they provide to women owned businesses, what would you recommend?
A: Coordinated outreach at a grassroots level and building relationships. Engagement and partnership with women’s networking groups help buid awareness and trust which in turn can lead to more people seeking funding to start or grow their business.
Q: Anything else you want to add you think is important?
A: We strive to provide ongoing business advising to every one of our clients, as well as relevant and engaging classes and access to an online class library. It takes a village to run a business so we are happy to be a piece of the puzzle!
We hope you enjoyed our interview with the Utah Micro-Loan Fund! It was great to explore their efforts to promote and provide accessible services to rural communities. They shared valuable insights on their strategies and initiatives, shedding light on the challenges they face and the impact they make. Join us as we uncover their approaches, successes, and the ongoing commitment lenders across the country demonstrate in empowering small businesses and the communities they serve.