Growth Loan 101

Growing a small business is difficult. For many entrepreneurs, securing the capital to finance their business is a large part of the difficulty, especially for individuals who have historically been excluded from capital systems. That is why Render Capital developed the Growth Loan: a character-based loan of up to $35,000 for small business owners who face difficulty accessing capital through traditional banks and lenders.

In a typical underwriting process, a bank or lender assesses the borrower’s perceived risk based on income, assets, and credit score. This process works for some, but can be highly exclusionary for people who have a good idea but don’t have substantial wealth or a good credit history. The Growth Loan makes capital more attainable by making lending decisions based on the forward-looking growth potential of a business and the social capital of its owners. We use traditional information (business and personal financial statements, and debt-service coverage ratio) along with information about the entrepreneur themselves, like expertise, business model, and reputation.

How the Process Works

After completing a short pre-qualification survey, applicants are invited to work with us in preparing the materials required for their loan package. At this point, applicants work collaboratively with the Render Capital team and the Louisville Small Business Development Center to complete their application and develop a growth strategy. The finished package, detailing the applicant’s financials, business model, character references, balance sheet, and use of funds, is sent to the loan committee for review.

Our loan committee is responsible for making all lending decisions for the Growth Loan Fund. It is made up of volunteer professionals from the region who want to help small business owners in their community succeed. Every approved applicant is invited to an in-person pitch and Q&A with the loan committee. This open-door process is unique: it provides applicants with invaluable feedback from successful members of the Louisville business community, and allows decision-makers to get to know the entrepreneur behind the application. Applicants receive an approval or denial on the day of the live pitch, and receive funding within five business days.

Once applicants are approved, we’re glad to have mission-aligned partners like First Financial Bank to guide businesses on their path toward bankability. First Financial supports our character-based model by providing microloans to Growth Loan companies in tandem with Render Capital. Qualified applicants are able to put loan funds to work right away, while building a relationship and credit history as a business client.

Real Results

The Growth Loan has proven successful in the Louisville community. The funding provides entrepreneurs the opportunity to grow their businesses with more space, staff, equipment, inventory, and marketing. One of our earliest Growth Loans was made to Farm to Fork. For founder Sherry Hurley, this opportunity was essential for the survival of the business, it allowed her to expand her staff by hiring a kitchen manager and an operations manager, and with that additional staff she was able to double her catering sales in one year.

The Growth Loan approach allows Render Capital to provide capital to businesses earlier in their growth process than most other institutions. For Froggy’s Popcorn, founder Melanie Fischer came to Render with a solid idea and proven demand. By securing funding through the Growth Loan, she was able to move from a shared kitchen space to her own, and purchase the “Snack Shack” to provide her products to customers in a COVID-safe way.

The Growth Loan is repaid over three years, during which it is important for the recipient to think of Render not just as a lender but also as a partner. The Growth Loan is “patient capital”, as loans are repaid, we aim to maintain relationships with our borrowers and provide flexibility based on their needs. Our goal is to ensure your success and support you through the beginning stages of your financial journey.