What’s in a name? A lot actually.
MEDA is excited to announce that it has legally changed the name of its community loan fund to Fondo Adelante.
Explains CEO Luis Granados, “We wanted to better reflect the Latino community in our loan fund’s name. ‘Adelante’ literally means ‘move ahead’ in Spanish, and the addition of the Spanish word for ‘Fund’ is the perfect complement. The culturally relevant Fondo Adelante branding showcases how we are uniquely positioned to aggregate capital — in the tens of millions, and eventually more — to address the challenges preventing our Latino community from moving forward, here in San Francisco’s Mission and across the nine-county Bay Area.”
The economic pressures impacting Latinos in the Mission are only a microcosm of what is being seen for the Latino community across the Bay Area: breakneck investment into tech companies attracting high-income workers; six-figure earners’ growing attraction to longtime working-class neighborhoods; real estate speculation driving up residential and commercial rents; tenant displacement; local-serving businesses losing their lower-income customers and being forced to close; and a continued reduction in available land to acquire for affordable-housing production.
Over the last four years, MEDA has broadened its organizational model to meet these dire challenges. One approach is the aggregation of community capital, through Fondo Adelante, to finance community-development solutions. This aims to counter the speculative hyper-investment that has taken place in the Mission and other Latino neighborhoods. Such speculation has fueled the purchase and flipping of apartment buildings, the development of luxury housing and the creation of high-end businesses that purposely do not cater to the needs of our low- and moderate-income constituents.
Fondo Adelante has a two-pronged strategy for deploying community capital. One effort is to bring the Mission and other Latino communities much-needed small-business capital — capital that explicitly pairs financing with one-on-one business support. The second piece of the strategy is the financing of land and apartment-building acquisitions to allow low-income families to continue to call the Mission their home for generations to come.
Launched in late 2015, Fondo Adelante has already established a strong track record of serving small businesses in our community:
- Over $2 million in loans disbursed
- 72 percent of loans to immigrant-owned businesses
- 70 percent to Latino-owned businesses
- 78 percent to low- to moderate-income (LMI) entrepreneurs
- 75 percent to female entrepreneurs
- Almost one-quarter to undocumented entrepreneurs
- No loans in default, and no late payments (Credited to one-on-one business support and strong coaching relationships.)
As an example of impact, catering venture D’Maize used an $80K low-interest small-business loan to renovate and open a brick-and-mortar Salvadoran restaurant on the 24th Street corridor in the Mission — no easy feat in one of the most overheated commercial rental markets in the nation. Similarly, El Gran Taco Loco harnessed the power of a $70K Fondo Adelante loan to relocate to a new Mission Street location after a catastrophic fire rendered their long-term spot to nothing but ashes.
Neither of these ventures could access the amount of capital needed — and at such low interest rates — at traditional lenders. With Fondo Adelante, these businesses, and the communities they serve, are moving forward.
Ready to scale
When in February 2017 Fondo Adelante received its CDFI certification from the U.S. Treasury Department, MEDA knew this was the springboard to expand beyond only providing microloans and begin to provide capital for a broader range of community needs.
Fondo Adelante is now becoming an SBA Microloan and Community Advantage lender to provide additional loan products and business coaching to address the needs of small businesses in the Mission and beyond. As an SBA Microloan lender, Fondo Adelante will have access to more capital to provide low-cost loans and intensive business support to our smallest and newest businesses in the Mission and other Latino communities. Through the SBA Community Advantage program, Fondo Adelante will be able to access government guarantees on loans of up to $250,000. This will allow the disbursement of much larger loans than done thus far, enabling MEDA to work with a more-diverse set of businesses. For example, a small manufacturing company that would create quality jobs in the community would now be able to turn to Fondo Adelante for financing. In other cases, MEDA would be able to serve businesses that the nonprofit has helped launch, but have outgrown the maximum financing Fondo Adelante currently offers; now larger loans can be provided to these businesses to foster their expansion. Additionally, the government guarantees will allow MEDA to take greater risks with these businesses, all to move our Latino community forward.
Fondo Adelante is also aggregating community capital as a means to address the greatest challenge facing San Francisco’s low- and moderate-income families: housing affordability. Fondo Adelante is launching a real estate lending program as a financing option for affordable housing and commercial real estate. The goal is to increase access to more efficient and affordable financing in a highly competitive real estate market. It is expected that this will have strong implications for the Latino community in the Mission, and in very tangible ways: acquiring even more apartment buildings to keep existing tenants in place; purchasing commercial spaces to affordably house small, local-serving businesses; buying spaces to house long-standing Latino-serving nonprofits and cultural institutions; and land-banking underdeveloped real estate for future affordable housing in our neighborhood.
Concludes Fondo Adelante Director Nathanial Owen, “The ambitious scaling of Fondo Adelante is a community-capital strategy specifically designed to move the Latino community forward in significant ways. As the only community development financial institution primarily focused on the Mission — or Bay Area Latino communities, more broadly — our new name is the perfect reflection of our commitment to deploying capital to support Latino residents, businesses and the institutions that serve them.”
Are you interested in supporting Fondo Adelante’s campaign to raise $100 million in community capital by 2020? Contact firstname.lastname@example.org.