Meriden nonprofit has $4M to lend

A Meriden community nonprofit hopes to find lightning strikes twice in Connecticut with its latest $4 million pool of funds to invest in less creditworthy, mostly inner-city small businesses and add more jobs in the state's southwest corner.

Community Economic Development Fund says it has up to $250,000 for businesses -- ranging from corner shops to small manufacturing outfits -- shut off from conventional bank loans for working capital.

Up to $500,000 is available for 25-year, fixed-rate commercial mortgages to buy or rehabilitate existing sites.

Businesses in urban Stamford, Bridgeport, New Haven, Danbury and surrounding communities are eligible for the loan fund.

CEDF President Donna Wertenbach said funds for the loan pool are from a consortium of private lenders that are matched by the state.

Twenty-one Connecticut and U.S. banks, including Bank of America and Wells Fargo, and the Mohegan Tribe and Connecticut Housing Finance Authority, are among the pool's investors.

Wertenbach said CEDF helps the bank lenders fulfill their Community Reinvestment Act responsibilites by making credit widely available, including to high-risk borrowers.

She said her agency is successful because its loan-underwriting guidelines are more flexible than what the banks can legally offer. Yet, the lenders, in helping a borrower obtain credit, usually winds up with a depositor.

"It's a win-win,'' Wertenbach said.

In 2003, the 17-year-old nonprofit agency established a similar fund in eastern Connecticut that Wertenbach says so far has lent nearly $4.7 million to small businesses and helped create scores of jobs in that region in response to closure of the Navy's submarine base.

In addition to that and the newest pool, CEDF operates a statewide loan pool with about $14 million, she said. All three average loans of around $80,000.

Eventually, CEDF will have three more zoned loan pools covering other regions of the state, she said.

CEDF also offers existing small entrepreneurs programs to upgrade their business skills at various training sites statewide, including East Hartford, Meriden, Danbury, Norwich, Bridgeport and Norwalk.