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MLA Newsletter: Automated Bank Referrals, Crowdfunding, New Lending Opportunity

In this Issue…

  • AEO Project CUE
  • Opening Doors Enjoys 3-Fold Growth on MMS
  • CalCAP ADA Financing Program
  • Crowdfunding Converts Social Capital into Currency
  • Research:  The Effect of Crowdfunding Performance and Outside Capital
  • News

ICYMI: Read and share Claudia's op-ed in American Banker –  How to Tame the Wild West of Marketplace Lending #microbiz #Fintech

AEO Project CUE

e0606d1f-2093-4c3b-ae97-27f87f3f5e13AEO has just completed the first cohort of Project CUE.  In a nutshell CUE is a technical solution to the bank referrals problem, something that we've talked about at past MicroLending Forums.  The platform provides an integrated place for bank declines to be shared and referred to CDFIs. This technology has great potential for lead generation as well as learning about credit issues through the backend data.

You can read all about Project CUE, how they designed it and what are the benefits for borrowers, banks and CDFIs.

If you're interested in participating in the second cohort of Project CUE, click on the link to learn more.

Opening Doors Enjoys 3-Fold Growth on MMS

Creative-MillworksOpening Doors made 18 loans totaling $200,000 in 2014, the year they joined the MMS cohort. This year, they're on pace to hit nearly 60 loans worth $360,000, a threefold growth in activity in just two years. The organization serves primarily refugees with little or no credit history, many of whom are seeking loans to start their companies or to formalize their existing cash-based businesses.

Read the rest of Andrew Cole's Opening Doors profile and the story of Andrei Sobolev and Serhiy Misiruk of Creative Millworks, Inc, an Opening Doors success (see photo above)!

LiftFund overhauled their MMS lending platform in September, implementing several changes requested by CAMEO users and streamlining the user interface. Most importantly, the team improved the document collection process. Loan officers can generate a tailored online list of necessary documents to send to borrowers. Coupled with the automated review process, this allows lenders to pre-approve an application and start collecting documents from the borrower in less than a day. A borrower can upload documents on their schedule from the comfort of their office or home.

Contact  if you're interested in learning more about how you can increase capital access in your community through CAMEO's MMS program. MMS, licensed through LiftFund, provides instant risk assessment and fast, quality underwriting to support microlenders in scaling up and maintaining strong portfolio performance.

CalCAP ADA Financing Program

The California Pollution Control Financing Authority (CPCFA) opened the new CalCAP Americans with Disabilities Act (ADA) Financing Program. This program will assist businesses with 15 or fewer full-time equivalent employees to finance retrofits to their facilities (<10,000 square feet) to comply with the ADA. Lenders can submit an amended Financial Institution Application to participate. The small business community needs your assistance in avoiding high frequency litigation and making California businesses accessible. CPCFA has already received news of businesses seeking qualifying loans, and staff will provide a referral to the first lender to sign up to participate.

Crowdfunding Converts Social Capital into Currency

Geefunding_crowdfundingDo you have clients with large, engaged online networks, but struggle to access the funds they need to launch or grow their businesses? Crowdfunding might be a great option for them, especially if your team knows how to coach successful campaigns.

Crowdfunding grew from $1.5 billion in 2011 to $34 billion in 2015. Susan Brown explains that crowdfunding has a lot to offer in addition to capital.

Kathleen Minogue, owner of Crowdfund Better, offered a great introductory webinar to CAMEO members that framed the crowdfunding opportunity and provided initial guidance on what skills and knowledge are needed for a successful campaign. It is only on our website through October!

Research: The Effect of Crowdfunding Performance and Outside Capital

crowdfundingThis study investigated the relationship between crowdfunding performance and several post-campaign benefits that entrepreneurs value such as the ability of entrepreneurs to obtain additional financing after the campaign ended. The study found that crowdfunding performance, or more specifically,  the dollars raised by the campaign has a positive effect on the likelihood of external financing. Crowdfunding serves as a useful “proof-of-concept” for entrepreneurs who seek additional financing. They also outline the project characteristics that influence the effect of crowdfunding success on  securing  external  capital.  Additionally, they document several non-financial benefits such as publicity and  securing business partnerships.