We are proud to announce that ICA is a founding member of the California Rebuilding Fund, a new small business loan program just launched in partnership with the State of California. ICA is joining fellow Community Development Financial Institutions (CDFIs), business support organizations, and traditional lenders to make it easier for small businesses statewide to access loans for economic recovery.
Serving underestimated entrepreneurs
In keeping with ICA’s mission to invest in underestimated entrepreneurs to close the racial and gender wealth gaps, the Fund will target businesses located in economically disadvantaged and historically under-banked areas of the state.
Through the Fund, ICA and our fellow CDFIs will move millions of dollars in low-interest loans to California’s small business community. The Fund will offer a variety of loan products up to $100,000 with fair and responsible terms. ICA will focus on the borrowers that need more flexible underwriting criteria which is aligned with our investment strategy and adds value to the ecosystem of lenders in our community.
“We believe that, now more than ever, a bold approach is needed to serve the small business community, and that’s why we are extremely proud to be joining so many of our peers in this partnership ” said John Gough, Chief Investment Officer at ICA. “ICA provides a continuum of flexible capital and expert advising and coaching, but we can reach more businesses and scale our impact, when we all work together,” he added.
ICA has a proven success record of accelerating and investing in local small businesses. We use a proprietary scoring mechanism that evaluates resilience and diversity of revenue, customers and suppliers, and the dedication and perseverance of the founder to guide loan decisions. To date, this approach has yielded a 15.2% Internal Rate of Return for our direct investments. The companies we support have a 14X multiplier on capital raised by ICA companies.
ICA’s participation in the California Rebuilding Fund is just one of the ways we have responded to the challenges faced by small businesses in 2020. Earlier this year, ICA launched our Rapid Response Liquidity Fund, an emergency loan fund providing 0% interest loans to small businesses affected by the pandemic. So far, the Response Fund has helped 26 businesses stabilize, representing more than 250 jobs locally. A full 88% of the ICA entrepreneurs receiving loans from the Rapid Response Liquidity Fund are people of color and/or women.
We are thrilled to be working with the State on the Rebuilding Fund, and excited about the opportunity to serve even more small businesses as we work towards our vision of an economy that works for all.
The California Rebuilding Fund is designed to support small businesses in California that employ 50 or fewer full-time equivalent employees and had revenues of $2.5 million or less in 2019. A full list of eligibility criteria can be found on the Connect2Capital website. If you are small business owner and would like to apply you can do that here .