Micro Enterprise Services of Oregon has already loaned more in 2023 than it issued in all of 2022.
The nonprofit MESO aims to help entrepreneurs in distressed communities start and develop businesses. Among other certifications, the group is a designated SBA micro-lender and a Community Development Financial Institution.
The group has become an important element in the financing landscape for entrepreneurs, especially for those unable to secure traditional bank lending. However, Executive Director Cobi Lewis, who has a background in both nonprofits and banking, most recently with Umpqua Bank, said MESO looks to help founders reach the point where they can transition to more traditional capital avenues, as well as build trust in financial institutions.
“From our perspective what we have seen is a lot of our clients, even those who don’t have small business loans, are just more distrustful and more unsure of traditional banking systems,” said Lewis. “So that’s already something that, as micro-lenders, we work toward building: a level of comfort between traditional financial institutions and our clients.”
Because, she said, ultimately a bank will have better rates in the long run and more products to offer than a CDFI.
Currently, MESO reports an uptick in its lending. From January to April, the group made 211 loans totaling $2.2 million. Much of the portfolio is for small loans that range in size between $25,000 to $50,000. Those account for about 30% of its loan portfolio.
Loans exceeding $100,000 are an area of growth for MESO.
See also: 5 alternative pathways to startup capital
Once businesses need, say, $500,000, they likely have higher sophistication levels and higher needs. Lewis said MESO will refer such borrowers to organizations such as Craft3, which can handle these more complex deals.
In addition to lending, MESO offers technical assistance to help entrepreneurs get started and build their skills. A sampling of recent classes included grantwriting for small business owners and tips on securing and opening storefronts.
The group has expanded statewide in recent years, with 56 employees across offices in Portland, Vancouver, Gresham, Beaverton, Clackamas County and Talent.
Those interested in working with MESO must go through an orientation, which is held monthly. The majority of MESO’s clients are in service and product industries, including food service and beauty products providers. It also has a growing child care services client base, for which the group has developed specific programs.
For its part, MESO has a default rate of less than 2% and didn’t have any clients shut down during the Covid-19 pandemic.
