High-risk loans--from a nonprofit community funds are filling a gap

• Published in: Inc. (Boston, Mass.) Vol. 29; no. 6; pp. 42 - 43
• Main Author: Grant, Elaine Appleton
• Format: Magazine Article
• Language: English
• Published: Boston Mansueto Ventures LLC on behalf of Inc 01-06-2007; Mansueto Ventures LLC
• Subjects: Bank loans; Banking industry; Capital investments; Company business management; Economic aspects; Industrial loan companies; Management; Nonprofit organizations; Services; Social aspects; Venture capital companies; United States; United States > US
• ISSN: 0162-8968

Things were not looking good for Leo White. A longtime manufacturing executive, White was eager to acquire a company called Bortech, which had been making welders to repair heavy equipment since 1989. But at the last minute, the bank backed out, and it looked as if the deal would fall through. Then a friend introduced White to John Hamilton, who runs Vested for Growth, a nonprofit that finances New Hampshire companies that cannot get funding from banks or private equity groups. Using a combination of debt and royalty payments, Hamilton was able to arrange half a million dollars in financing. In Leo White and Bortech, Hamilton saw an ideal opportunity. Bortech had been profitable for nine of its 10 years, but because of financial problems in its one off year, and its meager collateral, it was unbankable. Hamilton's risk paid off: In White's second and third years of running Bortech, revenue grew 40% each year.