The following post has been adapted from content provided by Opportunity Finance Network, a partner of the Department of Commerce.
In the wake of the recession there has been a rise in the number of online lenders offering small business loans, many of which promise owners “quick and easy” cash without disclosing hidden fees, high interest rates, and prepayment penalties. This increase in unregulated, online alternative lenders provides an unprecedented but confusing variety of financing options. Unfortunately, many of them are designed more to help a lender’s bottom line than to help a small business succeed. The tactics used are often harmful, and can even drive some to go out of business.
To help small business owners avoid these potentially harmful lenders, Opportunity Finance Network (OFN), a Philadelphia-based nonprofit organization, created Venturize, a public education and awareness campaign designed to help owners make the best borrowing choice for their business. The heart of the campaign is venturize.org, a free, online resource that provides small business owners with clear, trustworthy information and mobile-friendly tools to compare financing options or prepare a loan application. Venturize.org does not sell or refer business owners to specific products — it simply helps small businesses learn about different financing options and the small business borrowing process.
OFN is a national network of mission-driven, community development financial institutions (CDFIs) that provide affordable financial products and invest in opportunities that benefit disinvested communities across the United States. The Venturize website features an interactive map of mission-driven lenders to assist small business owners in finding CDFIs in their community to help them get affordable loans or assistance with starting or growing a business. Many CDFIs in Philadelphia are participating in the City’s Department of Commerce Capital Consortium, a group of nonprofit and for-profit lenders working together to expand access to capital for Philadelphia businesses.
Check out Venturize and the Capital Consortium today to see how these resources could help your business.
Content provided by Lauren Stebbins, Senior Associate, Small Business Initiatives at Opportunity Finance Network