Nonprofit Newswire | Nonprofits Filling Stimulus Gaps

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March 3, 2010; Minneapolis Star-Tribune | When a Minneapolis construction firm won contracts last June to weatherize homes with stimulus money it was thrilled, until it realized it couldn’t get a loan from a traditional bank to begin work. Instead the firm turned to a non-traditional nonprofit lender—a trend we’re keeping our eye on here at NPQ. These lenders are increasingly filling the gaps left by risk-averse “recession-bitten banks.” The construction firm is receiving $250,000 from the Metropolitan Economic Development Association and  $150,000 from the state’s Urban Initiative Program. They will now insulate 20 homes a week, up from 12. According to the Star-Tribune, “MEDA, based in Minneapolis, lent a total of $1.2 million to 12 minority-owned businesses last year. The Urban Initiative made 33 loans worth $670,000 last year to retailers, contractors, manufacturers and other inner-city job creators.” What this will mean in the future for these nonprofit lenders and the evolving role the sector will take in the recovery is yet to be seen. But we’ll continue to follow the trend here.—Aaron Lester