 | The First Children’s Finance Loan Fund: Modest investment, significant impact
10/8/2009 3:38 PMJerry Cutts, President and CEO
Think about paying 18 percent on a loan to start or grow a child care business. It’s frightening to consider how many child care professionals have done just that. I remember reading about family providers who were borrowing money at 18 percent, using their credit cards. That shouldn’t happen to those caring individuals who want to make certain children have safe, quality educational environments. Using high interest loans increases the risk of their financial failure, closing the doors to families who need them. Knowing that this situation happens too frequently, we decided to do something about it – asking the legislature and Minnesota financial institutions to invest in our children.
To launch the fund, the Minnesota Legislature appropriated $1 million to establish a revolving loan fund for child care businesses. Thanks to our friends in the private sector, we were able to match the appropriation and launch the First Children’s Loan Fund. Early loan fund advocates and leaders from our board of directors are profiled in this newsletter: Jay Hammond, CEO of Anchor Bank and Anchor Bank Heritage, and Edith Johnson with the City of Minneapolis.
Since our beginning, the loan fund has made $7 million in loans to over 250 child care businesses. In many cases, recipients are providers or centers that wouldn’t qualify for conventional financing, but that have the right approach and values to succeed. We also will take a second position for banks willing to do child care loans – increasing the ability of providers to secure funding. By working together with our partners, we are able to find financing for extraordinary people who want to provide quality care. We hope you’ll keep First Children’s in mind if you need a loan or if you know a high quality center looking to grow. We understand child care and early education. We understand business. And we’re here to help.
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