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Bank loans to small businesses are steadily increasing, a report by federal bank regulators said last week.
But some kinds of entrepreneurs still have to turn to "nontraditional lenders" for funding, a report by advocates of "social investing" said yesterday.
And there are a growing number of such lenders stepping up, said the Social Investment Forum Foundation and Co-Op America, which cited Boston's Wainwright Bank & Trust Company among 11 national lenders in such activity.
"Community lenders understand that traditional financial institutions do not adequately address the needs of women, people of color and other underserved populations," said Donna Katzin, executive director of Shared Interest in New York, which specializes in investing in South Africa.
Last week's report from the Federal Reserve and Federal Financial Institutions Examination Council said U.S. banks made 24 percent more small-business loans in 2002 than they did in 2001, following similar increases from 1999 to 2001.
But only 31 percent of the $253 billion in loans made to small businesses went to firms with revenue of $1 million or less. That's down from 40 percent in 2001 and nearly half the record of 60 percent made in 1999.
"The underserved groups, such as women and minorities, are still underserved," said Cheryl Smith, a vice president at Trillium Asset Management in Boston, one of the nontraditional lenders stepping up to plug the gap.
Trillium has been managing money with a social agenda for about 20 years, with $7.4 million invested for its clients in such traditionally underserved groups.
Wainwright Bank, which owns about a third of Trillium, was cited yesterday for its work with such women-owned ventures as Jules Catering, of Somerville.
Jules has grown to the third-biggest caterer in Greater Boston, thanks in large part to Wainwright's support 10 years ago when others said no, said co-owner Alice Fisher.
"One banker actually told me, "It must be so hard to run a small business when one little thing can sink you,'" said Fisher. "A lot of the banks were very patronizing to us, but not Wainwright."
"About 35 percent of our commercial loan portfolio is in social investments," said Steven Young, senior vice president at Wainwright.
Despite having less than 1 percent of the assets in its market, for example, Wainwright has helped build more than half the housing for AIDS patients here.
Helping others has helped Wainwright grow to a $600 million bank, Young said.
"We are a publicly-traded, commercial bank, but many of our investors and customers come to us specifically because of our socially active investments," Young said. ^ back to top ^
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