Pathway Lending (Southeast Community Capital Corporation)

Transcription

1 Pathway Lending (Southeast Community Capital Corporation) General Information Contact Information Nonprofit Address Pathway Lending (Southeast Community Capital Corporation) 201 Venture Circle Nashville, TN Phone (615) Fax Web Site Facebook Twitter Web Site Facebook Twitter At A Glance Year of Incorporation 1999 Pathway Lending Southeast Community Capital Corporation Pathway Women's Business Center Former Names Tech 2020 Finance Corporation 1

2 Mission & Impact Statements Mission The mission of Pathway Lending is to provide lending solutions and educational services that support the development, growth, and preservation of underserved small businesses, affordable housing, and sustainable communities. We are financing businesses and strengthening communities. We're certified by the U.S. Department of the Treasury as a Community Development Institution (CDFI), so we're held to high standards of responsible lending in underserved and often low-income communities. Pathway Lending operates a revolving loan fund that makes affordable loans to small business owners and micro-entrepreneurs that might not otherwise qualify for a bank loan in Tennessee and Alabama. Pathway Lending serves businesses throughout Tennessee and Alabama, but we focus our activities on underserved Target Markets that include businesses located in Qualified Investment Areas (as defined by low-income census tracts, poverty rates, and unemployment statistics) and African-American owned businesses. To reach more entrepreneurs, we opened the Pathway Women's Business Center, or Pathway WBC. While our focus is our female business owners, we help all entrepreneurs with classroom education, one-on-one mentoring, and counseling. Our education is approachable, affordable, and based on stage of business. We often partner with peer organizations to full curriculum gaps, ensure ongoing support for entrepreneurs beyond the launch phase, and to reach a wider audience. Background Founded in 1999, Pathway Lending's original mission was to increase access to capital for disadvantaged Tennessee businesses unable to access traditional financing. Initially formed as Technology 2020 Finance Corporation, a subsidiary of Technology 2020 in Oak Ridge, we provided capital to local businesses creating technologies from the Oak Ridge National Laboratory. In 2001, Pathway Lending became certified by the U.S. Treasury Department as a Community Development Financial Institution (CDFI), and is now the region's largest non-depository CDFI. Our mission is providing underserved small businesses with educational services and lending solutions that result in job creation and economic development. Since our beginning, we have provided 48,000++ hours of business counseling and training to 2,000+ entrepreneurs in underserved markets, including women owned businesses. In 2014, we launched the Pathway Women's Business Center to expand upon our mission of serving socially and economically disadvantaged businesses by dedicating new resources to the development and growth of women entrepreneurs. It is through the Pathway WBC program that Pathway Lending is able to offer affordable classes to entrepreneurs regardless of their capital needs. Pathway Lending's financial products support business acquisition or expansion, equipment and real estate purchases, general working capital needs, energy efficiency improvements, and the development/rehabilitation of low- and moderate-income multi-family housing. Our flexible loan products include features not offered by banks: up to 100% loan to value, extended repayment periods and low interest rates. As of December 31, 2017, to date we've made 1,211 loans totaling more than $226 million to 693 businesses in Tennessee and Alabama. Of these, 87% supported small, underserved and minority owned businesses in low income geographies. The flexibility of our loans, our ability to provide hands-on business coaching, and our close working relationships between clients and staff keep our historic loan loss ratio of approximately 2%, which is significantly less than the industry average of 4.7%. Pathway Lending participates in the U.S. Small Business Administration's Microloan Program and leverages these funds to ensure that TN companies can access capital at any level necessary to achieve their business growth objectives. The combination of business counseling, training and community focused investing enables Pathway Lending to make a significant impact to Tennessee's economy, helping to create or retain jobs and create opportunities for wealth creation in economically underserved communities. Impact In 2017, Pathway Lending and Pathway WBC produced the following impacts: 142 business loans totaling more than $40.2 million made to 107 businesses, including 20 minority-owned businesses and 35 womenowned businesses2,553 jobs impacted through either creation or retention8,153 hours of education delivered, including 3,333 hours of classroom training, more than 4,500 hours of one-on-one coaching, and 175 educational events195 affordable housing units renovated and 121 units preserved$661,835 in annual energy savings (that's 5,761,019 kilowatt hours) through our Energy Efficiency Loan Program 2

3 Needs As a nonprofit, Pathway Lending employed creative business principles by making its lending programs selfsustaining. With the introduction of the Pathway Women's Business Center, traditional nonprofit funding is needed to support the costs of providing in-depth business counseling, classroom training, and peer-to-peer learning to help entrepreneurs start, expand and successfully manage their businesses. Pathway Lending and Pathway WBC sponsors and contributions for programmatic support help us deliver educational services to underserved individuals resulting in personal financial stability, using entrepreneurship as the primary vehicle. The Center is also seeking experienced entrepreneurs and professionals to serve as mentors, instructors and workshop facilitators. Contact Amy Bunton by ing Amy@PathwayWBC.org for additional information. Pathway Lending is always seeking new investors for several revolving loan funds that serve various demographic and geographic markets. Investments typically qualify for CRA credit, and often qualify for tax credits in the state of Tennessee. Hank Helton at hank.helton@pathwaylending.org for more information. Other ways to donate, support, or volunteer Pathway Lending and Pathway WBC are always looking for new community partners to help address educational and funding needs in the small business space. For more information on partnering with us on an upcoming program or project, please info@pathwaylending.org. Service Categories Primary Organization Category Community Improvement, Capacity Building / Small Business Development Secondary Organization Category Employment / Management & Technical Assistance Tertiary Organization Category Education / Educational Services Areas of Service Areas Served TN TN - Davidson TN - Cannon TN - Cheatham TN - Davidson TN - Dickson TN - Hickman TN - Macon TN - Maury TN - Montgomery TN - Robertson TN - Rutherford TN - Smith TN - Stewart TN - Sumner TN - Trousdale TN - Williamson TN - Wilson 3

4 TN Pathway Lending is a regional resource provider that offers financial services and educational resources to businesses in all 40 counties served by the Community Foundation of Middle Tennessee. Pathway Lending provides economic development lending services and access to capital statewide in Tennessee and Alabama. The Pathway Women's Business Center's Target Market is the 16 County region anchored by Nashville MSA and Montgomery County region within Tennessee. Board Chair Statement Board Statement As the Board of Directors, we've witnessed firsthand how Pathway Lending and Pathway WBC work in tandem to deliver new, relevant, and innovative business solutions year after year. Pathway Lending's nearly 20 years of success and growth comes from an undying commitment to the rally cry of no missed opportunity. With funding and education under one roof, Pathway Lending is uniquely positioned to coach entrepreneurs from idea to launch to growth and beyond. The Pathway Lending team gets to know each client personally to help them field the opportunities at hand. They are successful because they recognize the importance of proactively building strong relationships with organizations and communities. Through strategic partnerships and meaningful client relationships, Pathway Lending identifies gaps in the market and provides much needed financial and educational resources. Pathway Lending frequently work with other nonprofits, business organizations, and local, state, and federal government agencies to address issues and capitalize on the opportunities facing the business community. Since 1999, Pathway Lending has tirelessly coordinated many community partnerships to increase delivery of financial and educational services, support comprehensive economic development strategies, and maximize community outcomes. Every day their work expands opportunities for Tennessee and Alabama businesses. And every year, they reach new levels of success and growing client impacts. I am proud to be a part of Pathway Lending and look forward to many great years ahead. Pathway Lending, Board of Directors CEO Statement Dear Friends & Supporters: Pathway Lending is in the business of expanding opportunity. We do this every single day, one relationship at a time. We expand opportunity for our clients: In 2017, we provided more than $40 million in responsible loans to 107 businesses, 51% of which were minority or woman-owned. We impacted 2,553 jobs and financed 316 affordable housing units to strengthen local communities. To help entrepreneurs capitalize on their ideas and opportunities for growth, we hosted 175 classes in 2017, and delivered 8,152 hours of business education. To help more mature businesses stay stable and well-positioned for growth, we saved clients more than $661,000 in 2017 through our Energy Efficiency Loan program. We expand opportunity for our partners: More than ever before, we're growing our public-private partnerships to thoughtfully expand our capacity to serve small businesses. In 2016 and 2017, we expanded partnerships, programs and geographies, including our expansion into Appalachian Alabama through a partnership with the State of Alabama and the Appalachian Regional Commission. We've grown our education partnership base through Pathway WBC to include SCORE chapters, SBDC offices, and peer organizations throughout the region to address gaps in curriculum and critical business training, and to provide ongoing support beyond the launch phase. We make more possible for our investors: We ended 2017 with over $137MM in total assets, an increase of $19MM over Those are hard-working dollars that generate impacts for the businesses we serve and those who have invested in our mission. For instance, every $1 loaned through the Tennessee Rural Opportunity Fund, returned $3 in economic impacts to the state from 2007 to 2017, while also generating strong returns to our investing bank partners. With a solid foundation, continued focus on strategic partnerships, and investments in staff and infrastructure, we are well positioned for growth in the years ahead. I am proud of our team's accomplishments and I am excited for the opportunities that lay ahead. As a friend, partner, or investor, I hope you will continue to support our journey of making more possible. Clint Gwin CEO/President, Pathway Lending 4

5 Programs Programs Pathway Lending Description Pathway Lending provides underserved small businesses with lending solutions and educational services that result in job creation and economic development. Loans The organization reached $137 Million in assets as of 12/31/2017 and is certified as a CDFI by the US Treasury. Pathway Lending is endorsed by the Tennessee Bankers Association and has 38 Financial Institution Investors and 15 Public and other Private Stakeholders. Pathway Lending's programs are designed to work with banks not compete with them. Of the loans originated by Pathway lending 87% by dollar amount and 69% by number supported small, underserved and minority-owned businesses in qualified low-income geographies. Budget Category Population Served Short Term Success Long term Success Program Success Monitored By Examples of Program Success Community Development, General/Other Small & Minority Business Development Programs Other Economic Level, Minorities, Females Pathway Lending's strategy is to collaborate with public and private organizations to create products that fill market gaps and appropriately meet the needs of the target borrowers (Business and Energy Efficiency). Pathway Lending's overall objective is to make more capital available to entrepreneurs and existing businesses to grow and retain jobs. The Long-Term goal of Pathway Lending is to graduate portfolio companies to traditional financing over a 3 5 year period. Of the loans originated by Pathway lending 87% by dollar amount and 69% by number supported small, underserved and minority-owned businesses in qualified low-income geographies. Program Success is monitored by the Pathway Lending Board of Directors, the U.S. Treasury, and the U.S. Small Business Administration. Success Stories are available at 5

6 Pathway Women's Business Center Description The Pathway Women's Business Center helps women entrepreneurs create life sustaining jobs not only for themselves but for their families and the individuals they employee. The Pathway Women's Business Center was created as a division of Pathway Lending to support the Nashville and Clarksville regional business communities with education and advice through one on one counseling, classroom trainig, peer-to-peer learning, and online learning. Budget 300,000 Category Population Served Short Term Success Long term Success Program Success Monitored By Examples of Program Success Community Development, General/Other Small & Minority Business Development Programs Females, General/Unspecified, In the short term, counseling and training will result in new business starts and job creation for existing women-owned businesses. Women will learn how to become certified as women owned businesses to gain advantages for government contracting opportunities.firms will learn how to access much needed capital in order to grow their companies and develop the infrastructure to support and sustain business growth. The ultimate goal of the program is that women will gain the skills needed to have sustainable businesses which improve their quality of life and grow their economic impact upon the regional community. Tennessee currently ranks 17th in terms of employment levels of women owned firms. By providing women entrepreneurs with the skills and training needed, an improvement in this ranking will benefit all concerned. U.S. Small Business Administration - OWBO Office, Pathway WBC Board of Advisors, Pathway Lending Board of Directors, Pathway Lending Executive Team Visit PathwayWBC.org for Success Stories. CEO Comments Please see Needs Statement. Thank you. 6

7 Governance Board Chair Board Chair Company Affiliation Mr. Dave Berezov Term Apr 2017 to Apr Associate Professor, Vanderbilt University School of Engineering Board Members Name Affiliation Status Mr. Dave Berezov Dr William H Byrd III Mr. Jon Davies Ms. Ivanetta Davis-Samuels Vanderbilt University School of Engineering University of TN, Institute for Public Service SVP Regions Financial Corporation SVP, GEneral Counsel Meharry Medical College Voting Voting Voting Voting Mr. Andre Gist CEO MIG Steel Fabrication, LLC Voting Ms. Cindy Herron Tennessee Valley Authority Voting Mr. Tom Hunter Retired & Current Entrepreneur Voting Ms. Kelly Magill Owner, KGV Studios Voting Mr. Hugh Queener Pinnacle Bank Voting Board Demographics - Ethnicity African American/Black 2 Asian American/Pacific Islander 0 Caucasian 7 Hispanic/Latino 0 Native American/American Indian 0 Other 0 0 Board Demographics - Gender Male 6 Female 3 Unspecified 0 Governance Board Term Lengths 3 Board Term Limits 0 7

8 Board Meeting Attendance % 90% Written Board Selection Criteria? Written Conflict of Interest Policy? Percentage Making Monetary Contributions 60% Percentage Making In-Kind Contributions 100% Constituency Includes Client Representation Number of Full Board Meetings Annually 4 Standing Committees Finance Advisory Board / Advisory Council Board Governance Program / Program Planning Risk Management Provisions Accident and Injury Coverage Automobile Insurance Automobile Insurance and Umbrella or Excess Insurance Blanket Personal Property Commercial General Insurance Commercial General Liability Commercial General Liability and D and O and Umbrella or Excess and Automobile and Professional Commercial General Liability and Medical Malpractice Computer Equipment and Software Directors and Officers Policy Disability Insurance Educators Errors and Omission Liability Employee Benefits Liability Employee Dishonesty Employment Practices Liability Fiduciary Liability Flood General Property Coverage General Property Coverage and Professional Liability Internet Liability Insurance Life Insurance Medical Health Insurance Professional Liability Property in Transit and Off Premises Risk Management Provisions Special Event Liability 8

9 Umbrella or Excess Insurance Workers Compensation and Employers' Liability Additional Board Members Name Mr. Kelley Key Ms. Joan LaGrasse Ms. Kelly Magill Ms. Janet Miller Ms. CeCe Moore Ms. Rachel Schaffer Ms. Lori Smith Ms. Brittany Wegusen Ms. Crissy Welhoelter Affiliation Women's Business Center Board of Advisors Women's Business Center Board of Advisors Women's Business Center Board of Advisors Women's Business Center Board of Advisors Women's Business Center Advisory Board Women's Business Center Board of Advisors Member Women's Business Center Board of Advisors Member Women's Business Center Board of Advisors Women's Business Center Boad of Advisors CEO Comments The Pathway Lending is overseen by a Board of Directors which has fiduciary responsibility and governance over the operations of Pathway Lending. The Pathway Women's Business Center is assembling a group of experienced professionals from a variety of industries to serve on a Board of Advisors who will be selected based on community involvement and a willingness to fulfill the mission of helping entrepreneurial women grow and start a business. 9

10 Management Executive Director/CEO Executive Director Mr. Clinton B Gwin Term Start May Clint.Gwin@PathwayLending.org Experience Clint Gwin has served as Pathway Lending President since His responsibilities include daily operations, credit quality, new program development and strategic planning. He has extensive experience in compliance and financial insittution regulation from his 10 years with the Federal Deposit Insurance Corporation (FDIC). Mr. Gwin received a Master of Business Administration in May 2000 from Vanderbilt University's Owen Graduate School of Management and has an undergraduate degree in economics and business from Centenary College of Louisiana in Shreveport. Mr. Gwin serves on the Advsiory Council of the University Center for Industrial Services and SunTrust Community Developmet Corporation for its New Markets Tax Credit Program. Locally, he sits on the board of Affordable Housing Resources and serves as the Finance Committee Chair. Highlights of his professional career include creation of the $12 million Tennessee Rural Opportunity Fund, leadershipof the largest non-bank Community Development Financial Institution in Tennessee, Chairman of the National FDIC Field Office Supervisors Council, Co-Project Manager of the Compliance Examination Manual Task Force, and his 2011 appointment to the Federal Reserve Board Consumer Advisory Council. In 2018, Mr. Gwin was appointed by President Trump to serve as a member of the Community Development Advisory Board, which advises the U.S. Treasury Department's Community Development Financial Institution's (CFDI) Fund on policies and activities. Gwin will serve a term of four years on the board. Former CEOs Name Term Mr. Tom Rogers Dec Jan 0 Staff Full Time Staff 29 Part Time Staff 0 Volunteers 25 Contractors 2 Retention Rate 95% Plans & Policies Does the organization have a documented Fundraising Plan? Under Development Does the organization have an approved Strategic Plan? Number of years Strategic Plan Considers 5 When was Strategic Plan adopted? Apr

11 In case of a change in leadership, is a Management Succession plan in place? Does the organization have a Policies and Procedures Plan? Does the organization have a Nondiscrimination Policy? Does the organization have a Whistle Blower Policy? Does the organization have a Document Destruction Policy? Affiliations Affiliation Year CABLE 2015 Chamber of Commerce 2002 Association for Enterprise Opportunity (AEO) 2003 Cheatham County Chamber of Commerce 2016 External Assessments and Accreditations Assessments/Accreditations Community Development Financial Institutions Fund of the U.S. Department of the Treasury - Community Development Entity Certification (Annual) Year 2001 Awards Awards Award/Recognition Organization Year Tennessee Micro Lender of the Year Women's Business Center Designation TN Microlender of the Year Power of Inclusion Award - Non profit category U.S. Small Business Administration U.S. Small Business Administration U.S. Small Business Administration CABLE Nashville 2017 TN Microlender of the Year U.S Small Business Administration 2016 Senior Staff Ms. Barbara Harris Title CFO Experience/Biography 11

12 Ms. Amy H Bunton Title SVP Experience/Biography Mr. Hank Helton Title SVP Experience/Biography CEO Comments Nothing to note at this time. 12

13 Financials Fiscal Year Fiscal Year Start Jan Fiscal Year End Dec Projected Revenue $6,534, Projected Expenses $6,094, Endowment Value $0.00 Endowment Spending Percentage (if selected) 0% Detailed Financials Revenue and Expenses Fiscal Year Total Revenue $15,434,507 $6,262,637 $6,747,780 Total Expenses $8,860,235 $6,588,434 $6,067,039 Revenue Sources Fiscal Year Foundation and Corporation $0 $0 $0 Contributions Government Contributions $3,485,304 $821,029 $2,849,618 Federal $0 $0 $0 State $0 $0 $0 Local $0 $0 $0 Unspecified $3,485,304 $821,029 $2,849,618 Individual Contributions $6,378,418 $611,118 $348,348 Indirect Public Support $0 $0 $0 Earned Revenue $5,404,133 $4,725,540 $3,487,565 Investment Income, Net of Losses $163,810 $97,455 $61,640 Membership Dues $0 $0 $0 Special Events $0 $0 $0 Revenue In-Kind $2,842 $7,495 $609 Other $0 $0 $0 13

14 Expense Allocation Fiscal Year Program Expense $8,296,504 $6,031,657 $5,512,963 Administration Expense $546,079 $520,756 $511,417 Fundraising Expense $17,652 $36,021 $42,659 Payments to Affiliates -- $0 $0 Total Revenue/Total Expenses Program Expense/Total Expenses 94% 92% 91% Fundraising Expense/Contributed Revenue 0% 3% 1% Assets and Liabilities Fiscal Year Total Assets $137,085,479 $118,072,452 $89,555,683 Current Assets $135,065,586 $116,046,622 $87,486,110 Long-Term Liabilities $79,827,333 $73,204,628 $51,531,561 Current Liabilities $28,018,137 $22,202,087 $2,142,588 Total Net Assets $29,240,009 $22,665,737 $22,991,534 Short Term Solvency Fiscal Year Current Ratio: Current Assets/Current Liabilities Long Term Solvency Fiscal Year Long-Term Liabilities/Total Assets 58% 62% 58% Top Funding Sources Fiscal Year Top Funding Source & Dollar Amount Contributions, Gifts, and Grants $6,378,418 Program Revenue $4,725,540 Program Revenue $3,487,565 Second Highest Funding Source & Dollar Program Revenue Government Grants Government Grants Amount $5,404,133 $821,029 $2,849,618 Third Highest Funding Source & Dollar Amount Government Grants $3,485,304 Contributions, Gifts and Grants $611,118 Contributions, Gifts and Grants $348,348 Capital Campaign Is the organization currently conducting a Capital Campaign for an endowment or the purchase of a major asset? No Capital Campaign Goal $0.00 Capital Campaign Anticipated in Next 5 Years? No State Charitable Solicitations Permit TN Charitable Solicitations Registration - Expires June 2019 Organization Comments Opportunities: Pathway Lending (PL) is uniquely situated to raise capital for the various lending programs at PL. Investing in Pathway Lending provides banks with Community Reinvestment Credit and Tax Incentive opportunities thereby allowing Pathway Lending to raise capital for growth. The Tax Incentive initiative allows PL to borrow money that over time is converted to equity. Challenges: The challenges for PL are centered mainly around the ability to loan money in a tight interest rate market. Explanation of differences in revenue, expenses, 14

15 assets, andliabilities from year to year: Revenue PL revenue fluctuates largely because of grants and contributions. While financing revenuecontinues to grow due to the increase in loans outstanding, PL remainsdependent upon operating grants from state and federal sources. This is due in large part to the increase in interest expense. However, as futuredebt converts into equity there will be less dependency on grants andcontributions as interest expense will end for the convertible debt. Over the years, grants availability has been unpredictable which leads to year to year differences in revenues. Expenses:PL expenses are impacted by interest expense (as mentionedabove) and the Loan Loss Reserve (LLR) calculation. As loans outstanding increase, so does the allowance for loan losses which is reflected on the income statement. The increase in loans outstanding increases financing revenue but it also increases the LLR expense. Other impacts to the LLR expense are the actual writeoffs and recoveries of bad debt. While PL historically has a low percentage of writeoffs, any writeoff will impact the LLR calculation as will the recovery of those written off. Assets: PL Assets change each year because of the continued increase in cash from investments which in turn is loaned out to borrowers which increases loans outstanding. As PL continues to expand their programs, assets will increase in those areas. Other assets remain fairly consistent from year to year.liabilities: The change in liabilities from year to year is largely a result of increasing debt due to the need for more capital for loans. One other major change to the liability section is the recognition of deferred revenue from grants that were contingent upon results. However, the deferred revenue will soon be depleted and the impact liabilities will decrease. GivingMatters.com Financial Comments Financial figures taken from Form 990. Foundation or corporate grants may be included in the Individual Contributions sum, as these amounts are not separated in the 990. Form 990 was prepared by Kraft CPAs. PLLC. Comment Provided by Nicole Rose 05/25/2018. Created Copyright 2018 The Community Foundation of Middle Tennessee 15