A small Fresno bank is teaming up with a Bay Area investment service company to help young businesses get the money they need to grow.
Fresno First Bank and Breakaway Funding this week introduced a hybrid crowdfunding process for business lending. It takes the new world of crowdfunding – raising money through contributions from the public and investors – to raise equity and combines it with a little bit of coaching to get a business ready to approach a bank for a loan.
“If you’re a small company, just starting up, it’s difficult to get traditional bank financing,” said Steve Canfield, the bank’s executive vice president and chief financial officer. A business in its first year of business does not “have a huge capital base. It may not be profitable yet, not making any revenue yet. Traditional banks are very hesitant to lend to those people.”
Breakaway will provide the business screening and through its Community Capital Marketplace, a proprietary process, will match businesses with investors. Then it will deliver the loan-ready business to the bank. Fresno First will make $10 million in loans available to Valley businesses.
“Once they’re well capitalized like that and basically got more of a base than just a guy in the garage with a good idea, then it’s more attractive for us as a lender to provide financial support and loans,” Canfield said.
“We’re going to be able to reach down into the market to hopefully lend to younger companies at an early point than traditional banks.”