Interview with Pursuit
Steven Cohen, President of Pursuit Community Finance and Sherri Falck, Vice President
How is Open4 helping you as an organization and what does it mean to you?
Steven: The support provided by Open4, and the entire initiative—in terms of working with other stakeholders and making connections—are very important. Through Open4, we’re able to provide more intensive advisory services alongside lending that we would not have been able to do otherwise.
Sherri: The support we received from Open4 allows us to invest more in our clients to help them sustain and grow their operations and ultimately create jobs in their neighborhoods. For example, our advisory services are helping to address the challenges faced by business owners during the pandemic. Intensive consulting through our Consulting Corps resulted in a variety of deliverables to business owners – from websites to digital marketing campaigns to financial projections for new lines of revenue. All deliverables we produce for our clients are at no cost to them with the goal of increasing business revenue and strengthening cash flow, especially during the difficult time brought on by the pandemic.
Could you tell us about the relationships that you have with your clients, the small business owners and how Pursuit is different from a traditional lender?
Steven: CDFIs are generally non-profits that meet market gaps in affordable housing, social services and small business. We focus on small business. The difference between Pursuit and a regular lender is that we’re focused on folks that might have some difficulty accessing traditional capital. They might go to predatory lenders, of which there are many, including online lenders. We have a mission to help them grow their business, create jobs, get access to capital they wouldn’t be able to get otherwise, and transition them into more traditional credit products from banks over time.
CDFIs are particularly relevant right now because COVID created a much larger pool of un-bankable businesses or businesses where there’s some real question in terms of how this changed marketplace will impact their prospects. Support we receive from funders like Open4 allows us to take greater risks and to invest in those businesses with more intensive levels of assistance— which includes advisory services.
Sherri: We form a relationship with each business owner and listen to their needs. By the time they come to us, they might have already been declined by a bank so we’re having conversations to uncover the assistance they need, whether it’s through our CDFI or the larger ecosystem and identifying what the hurdles were to traditional financing. It’s not transactional, it’s more like a partnership in a way. Through Open4, we’re able to assist them in ways and certainly at a scale we haven’t before.
Could you tell us about some of the barriers that the women- and minority- owned businesses run into? What are their core barriers?
Steven: We see disparities in capitalization, cash flow, and numbers of employees. Some may not have the networks that other businesses may have. We design our loan products and our business advisory services to directly address those needs in terms of being able to lend to folks with more limited cash flow. We’ll work with businesses with lower credit scores and fewer years-in-business than a traditional bank might. Our advisory services are designed to help businesses address those challenges and to connect them with consultants and experts through our Consulting Corps. We’re growing our capacity to do that with mentors and this grant supports that so we can provide intensive assistance and connect them to resources that they either couldn’t afford in the past or would have difficulty finding.
How does the work that you do for small businesses affect the regional economy?
Steven: We know that small businesses are critical to the regional economy. We also know that big investments in terms of infrastructure such as funding from New York State, is critical, but it’s up to us to make sure that small businesses have resources to participate in those larger-scale economic development efforts. That’s really important to the local economy—projects should not just involve the big developers; funding needs to trickle down into the sub-contractors and into the neighborhoods. That’s what we’re focused on doing—going into the neighborhoods and assisting the subcontractors or main street small businesses, and helping all those folks be able to participate in the revitalization of the region.
It’s not just a top-down investment approach and it shouldn’t be. It needs to be holistic and that’s what we’re trying to do – work with neighborhood businesses and MWBEs, veterans and others that are underserved, and make sure that they are not left out of any regional economic recovery.
What do you think the priorities are for helping small businesses start and grow in the next few years?
Steven: Well, that’s a very big question! I think that the focus really is connected to how small businesses can participate in the overall recovery, rebuilding and development of the region. There are different ways to do that—one big piece is awareness —businesses might be confused by everything that’s out there and how to plug in. One big priority of ours is to make sure that businesses know we are here, that we offer business advisory services and lending to help them take advantage of their own business opportunities.
Access to capital, especially affordable alternatives to traditional bank financing is important for the community. We want to convey that we’re convenient and fast and cheaper than a lot of other alternative options. We are a nonprofit with a mission to serve you.
Through our business advisory services, our priority is to help position local businesses so they can transition into traditional financial institutions. Our loan programs, coupled with our advisory services, aim to assist small businesses to be able to sustain and thrive in our changing economy.