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Interview with WEDI

Carolynn Welch, Executive Director and Yanush Sanmugaraja Senior Director of Economic Development

How has Open4 helped you?

Carolynn: Through capacity building – WEDI went from $600,000 a year to $2 million since the time I have been here so we’ve seen significant growth. We typically do about $100-$200,000 in lending, but with Covid we have increased to over $780,000 in grants and loans last year. Open4 looks at the structure of our systems to see if we can support these financial products. WEDI works with low-income individuals, including refugees and immigrants. This is a population that has a difficult time securing a business loan, and many have unique ideas. Many have no credit/zero credit score, nor have they built credit history, making them ineligible for most loan products. Many of our minority clients may have bad credit history due to circumstances such as not understanding how credit works, etc. We work to find a program for them.

Could you tell us a little more about some of the most common barriers that small business owners need to overcome, especially minority- and women-owned businesses?

Carolynn: I think they face a lot of the obstacles that low-income or typically “left behind” groups face in terms of just not having access to banking, traditional financial products, and not really having the background or history where the U.S. financial system was something they learned when they were young. It’s a generational piece that I think happens and it’s really hard to break.

Yanush: Women in the immigrant communities that we serve, a lot of them have just immigrated from countries where women-owned businesses were not supported. Navigating through an environment where the ecosystem is so supportive and has so many resources for women-owned businesses here – it’s very new. So that’s a challenge. But then also in the U.S. it’s also important to remember it was only like 25 years ago that women were no longer required to have a male spouse co-sign on a loan with them.

How do you feel your work is impacting the Western New York economy?

Carolynn: I think what’s really neat about what we’re able to accomplish is that you can see the impact, especially in some lower-income communities. Grant Street, I think is a prime example. A significant number of businesses there were started with WEDI funds and WEDI assistance. So I think our direct impact is really seeing people from the communities that they live and work in, who are low income, being able to successfully start and run their own business.

Yanush: Just a piggyback off of that — we really highlight and uplift microenterprises that we work with and connect them to larger networks, larger CDFIs, and banks eventually. Through our loan volume, we’re lending the smallest dollar amounts in the ecosystem. Our products and services are really just tailored to those very small microenterprises. So I think that’s a big impact that we’re having in the ecosystem in Western New York – we’re connecting some of the smallest businesses and startups to the larger networks that can help them scale.

From your perspective, what you think the highest priorities are for the next year or two to really help small businesses?

Carolynn: I think right now, people are nervous. They need more support than they probably previously did. I think there’s another skillset that’s going to have to come with small businesses as long as we’re kind of still in this place where people might not be able to be fully operating or fully open. It comes with a whole piece of being able to have skills with technology and being able to have a virtual platform that they’re able to utilize. And one of the huge obstacles in Buffalo is there’s still an extremely significant technological divide. And a lot of the places where people typically would be able to go use a computer, like the library, may not have the availability that they once had. So the overrun system of public access being cut in half is really putting people at a disadvantage.

I think just giving people hope is really important right now. I think it helps for them to know that we’re going to be standing by their side, because despite it feeling like we’re coming to the end of this, I’m not sure that we are. And I think there’s some scary times to come and being able to reassure people during that is key. That’s where our technical assistance is more important than it ever was. I think people who maybe were in a precarious place when all of this started with their credit as a result of loss of income, because so many people from low-income communities were disproportionately impacted in terms of their job, may be in a worse place than they were when they started off, in terms of their credit score, credit history in some of the indicators typically utilized to see if they would be able to pay back a loan.