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84 Locavesting
Taking the Middle Path in New Hampshire
Micro- enterprises are just one part of the equation.
In Concord, New Hampshire, not far from Main Street, is
a modest stretch called Wall Street. It has little in common with
its more famous namesake in New York. Concord’s Wall Street is
just two blocks long and its low- rises are mainly populated by dentists.
But at the eastern end of the street, some promising fi nancial
innovation is underway at the offi ces of the New Hampshire
Community Loan Fund.
In its nearly three decades of existence, the loan fund
has mainly supported community- owned housing and microenterprises
in the state. In its fi scal 2009, for example, the fund’s
microcredit program loaned more than $213,000 to 66 businesses
with up to fi ve employees, increasing their gross sales by an average
of $13,249 and helping to create or retain 1,934 full- time
equivalent jobs. Individual investors in the fund, mean while, get a
steady 5 percent return for a 10-year investment in the fund.
For the past several years, the organization has been devising
new ways to help established small and midsized businesses—from
$2 million and $15 million in revenues and 10 to 150 employees—obtain
much- needed expansion capital. That’s been the mission
of John Hamilton, vice president of economic opportunity at
the fund and managing director of its Vested for Growth program.
Hamilton sees a fi nancing gap for established businesses that are
too risky for banks’ lending models but that either can’t attract
or don’t want equity fi nancing. Vested for Growth is designed
to address these high- growth, high- margin businesses that fall
through the cracks of the fi nancial market.
“The market thinks in bipolar ways—either bankable debt
or equity, as if those are the two choices that are out there,” says
Hamilton. And yet, he says, there is a giant gap between the two.
“Think of all the businesses that fall in between.”
In New Hampshire, businesses with $2 million to $15 million
in revenue and up to 150 employees make up the backbone of
the state’s economy, he says. These businesses tend to create good
jobs that stay local. Yet if they don’t have a perfect track record or