New lender sets up office in Walla Walla

By: Vicki Hillhouse - Sep 14, 2016
Source: Union-Bulletin

A nonprofit lending outfit with a more than 20-year history of loans to businesses and people that don’t qualify for traditional bank financing has opened a new office in Walla Walla.

Craft3 is a regional community development financial institution that’s infused about $400 million across Washington and Oregon. Its new office is at 103 E. Main St.

Operators say the new spot will improve access to capital for small businesses in the area. This is the seventh community with an office for Craft3. The Walla Walla spot will serve Umatilla, Morrow, Wallowa, Union and Baker counties in Oregon; and Walla Walla, Columbia, Benton, Franklin, Yakima and Klickitat counties in Washington.

“Craft3 has expertise in lending for agriculture, value-added food processing and manufacturing, as well as retail and tourism — so we feel like the Mid-Columbia Basin will be a great home for us,” President and CEO Adam Zimmerman said in an announcement.

In many of the communities it serves it also offers affordable loans to homeowners for septic system repair or energy-efficiency upgrades.

The operation launched in Ilwaco, Ore., in 1994.

It borrows capital from national, regional and community banks; federal, state and local governments; and private, community and family foundations at below-market rates. It also works with grantors and donors, providing capital and operating grants that helps grow the revolving loan fund, leverage private capital and support operating costs, the company explains.

Its target is underserved communities where securing lending may be difficult through traditional resources because the applicant is a startup, has no collateral or has poor credit.

With the Lake Wallowa Lodge, for instance, Craft3 used a Conservation Bridge Fund loan to help preserve 9 acres of property and the lodge, which had otherwise been headed for auction after the death of its previous owner.

Selecting Walla Walla for expansion made sense after conversations with economic development officials, government nonprofits and more, added Carl Seip, Craft3’s vice president of external affairs.

He said local leadership had an interest in collaborating with the firm over the long-term.

“Since we’re a nonprofit mission-based lender providing capital to underserved communities, measurable impacts are obviously very important,” Seip said.

Walla Walla City Manager Nabiel Shawa said he’s seen the effects through Craft3 on small, family businesses and rural coastal communities during his time working on the Washington coast.

“Beyond providing traditional financial services, Craft3 separated itself from the traditional finance industry by extending loans to unique entrepreneurial enterprises that would not typically qualify for credit,” Shawa said in a prepared statement. “Craft3’s mission is to build a small business ecosystem that improves the entire Pacific Northwest’s economy and environment — and they’re a superb fit for our special place, the Walla Walla Valley.”

The operation also has the endorsement of Milton-Freewater Downtown Alliance Executive Director Randy Grant, who said the staff is a willing listener of ideas and can provide suggestions for financing.

The local office is staffed by Phil Serjeant. An open house for the community is slated for Oct. 20.