Craft3 keeps eye to the future

By: Kyle Spurr - Dec 24, 2014
Source: The Daily Astorian
Craft3, a nonprofit community development financial institution, opened in the Lower Columbia region 20 years ago.
In the past 20 years since Craft3, a nonprofit community development financial institution, opened in the Lower Columbia region, the company has rarely shied away from risk.

While more traditional banks and lending services focus on a borrower’s past, Craft3 has made its mark valuing a borrower’s future goals.

Business lender Scott Huddleston said about 80 to 90 percent of loaning at Craft3 is projection based.

“The reason the borrower is taking out a loan is so they can expand, they can hire, get more raw materials with the expectation to make more money,” Huddleston said. “What we do is we assess what the risks are and assess the management’s capacity to perform to the plan.”

Craft3 is celebrating two decades in the Lower Columbia region. In 1994, Craft3 — then known as ShoreBank Enterprise Pacific — was created by John Berdes and Mike Dickerson to support the Northwest coastal communities.

Based in Ilwaco, Wash., and in Astoria at Pier 39, Craft3 has provided more than $45 million in financing for local economic and community development activities.

“Craft3 started with just two employees. Today, we employ nearly 50 passionate people.” Chief Operating Officer Sonya Lynn said.

Some Craft3 borrowers include the Bridgewater Bistro in Astoria for add-ons to its building, the city of Astoria for remediation of Astoria Plywood Cooperative brownfield into Mill Pond Village and Clatsop Community College for the Columbia Hall construction.

Other collaborations resulted in the development of commercial projects, revitalization of historic buildings in downtown Astoria, tourism and hospitality industries, and investments in the public and nonprofit sectors, according to Craft3.

The nonprofit works with businesses unable to get bank financing because they are start-ups, have insufficient collateral or poor credit.

Its mission is to strengthen economic, ecological and family resilience throughout all of Oregon and Washington. Unlike banks, Craft3 does not lend other people’s money. It lends money that is lent to it from large financial institutions, nonprofit organizations or granted by governmental organizations and foundations.

“We are company that is almost always in a mode of evolution,” Chief Lending Officer Walt Postlewait said. “We are continually increasing the scope of what we do. Not only in doing more of our basic work, but just in taking on new kinds of projects as well.”

In the early years, many of Craft3’s clients were fishing and wood product businesses such as Goose Point Oysters and Trails End Recovery.

Huddleston said Craft3 serves similar markets today in forestry, fishing, agriculture and hospitality. In the urban markets, Craft3 sees a large number of retail and manufacturing businesses.

Last year, Craft3 opened an east-side office in Bend. In addition, plans are underway to open an office space in Spokane, Wash., early next year.

Over the years, Postlewait said, Craft3 has become a leader in the community development financial institution industry. Craft3 finds itself helping smaller CDFIs around the region.

“We are supporting other smaller loan funds that do what we do,” Postlewait said. “We actually take money and lend it downstream to them. As we have grown, we are trying to strengthen the entire fabric of this responsible alternative commercial financing needs.”

Although its reach is now statewide in Oregon and Washington, Postlewait said, the nonprofit still focuses on the basic principle of connecting a borrower with capital — the same mission that formed the business on the coast two decades ago.

“Frankly, Craft3 and the rest of the CDFI industy, we are rock stars of small business financing,” Postlewait said. “The big banks can’t go there and they won’t go there. But this is what America was founded on and supports all of Oregon and Washington from the ground up. We are in this space doing it the right way, growing Craft3 into an ongoing institution.”

Local projects supported by Craft3

  • Adrift Hotel & Spa, Long Beach, Wash.: Installation of a solar hot water heating system, high-efficiency gas boiler and a rainwater catchment system;
  • Bridgewater Bistro: Restaurant build-out and equipment purchase;
  • City of Astoria: Remediation of Astoria Plywood Cooperative brownfield into Mill Pond Village;
  • Clatsop Community College: Columbia-Pacific Hall construction;
  • Fort George Brewery and Public House: Install a 30- barrel brewing system, make tenant improvements and open a cold storage warehouse;
  • North Coast Land Conservancy, Seaside: Acquisition of 40 acres along the North Fork of the Necanicum River;
  • Northwest Oregon Community Development Collaborative: Affordable housing real estate development;
  • Ocean Beach (Wash.) Hospital: Modernization of essential computer systems and software;
  • Pacific Integrated Martial Arts, Long Beach, Wash.: Purchase commercial real estate and for working capital;
  • Pier 39: Renovation, expansion and waste pump installation;
  • Shoalwater Bay Tribe, Tokeland, Wash.: Construction of a 14,000 square foot Wellness Center.