Clark Bastian, left, Fidelity Bank, Chairman of the Board, stands with Christina Long, with NetWork Kansas. Photo credit: Fidelity Bank

Investment Connection often is described as “Shark Tank” for nonprofits, with a focus on the nonprofits that pitch their projects at each event or webinar.

NetWork Kansas’ experience with Investment Connection shows the potential effect is much larger. Any proposal approved and posted on the Investment Connection website is likely to be Community Reinvestment Act (CRA) eligible. A nonprofit, then, can shop its proposal to banks and foundations. That’s exactly what NetWork Kansas did. The result is $991,667.33 and counting, with funds used to help small businesses weather the current economic and health crises.

The Federal Reserve Bank of Kansas City founded Investment Connection to help connect banks and other funders with projects across the seven states of the Bank’s Tenth District. Investment Connection reviews community development organizations’ proposals for CRA consideration, informs the broader funding community about the opportunities, issues and challenges in communities, and assists in connecting banks and other funders to those needing funding. Seven other Federal Reserve Banks have launched their own Investment Connection programs.

In 2020, 13 banks operating in Kansas contributed almost $992,000 to NetWork Kansas to increase local loan fund capacity and launch Restart Kansas, a loan program that supports the immediate needs of local businesses due to the COVID-19 crisis.

Demand continues from small businesses for the Restart Kansas lending program. Network Kansas has used it to make 52 loans totaling  more than $500,000. Restart Kansas offers a 2% interest rate on four-year loans of up to $20,000 to rural, urban distressed, and disadvantaged small businesses across Kansas.

The loan breakout so far:

  • 66% are in communities of 10,000 or fewer residents;
  • 63.5% of businesses are women- and minority-owned;
  • 23% of businesses are minority owned.

“This isn’t just a program to support businesses,” said Aaron Bastian, president and CEO of Fidelity Bank, headquartered in Wichita. “Restart Kansas is lending confidence to business owners, employees, customers and their families all across Kansas. We hope other banks and funders will join us in helping to ease the burden for these small businesses.” 

NetWork Kansas uses Investment Connection dollars to stimulate local loan funds for community-based gap financing, including loans it makes through Restart Kansas. When businesses repay their loans, the repayments remain in the local community. That builds long-term, sustainable funding.

NetWork Kansas allocates additional funds across communities through local and statewide loan programs and technical assistance. NetWork Kansas’ small business programs, such as Restart and Entrepreneurship Communities, continue to assist small businesses and the communities in which they reside throughout Kansas.

“NetWork Kansas Entrepreneurship Communities enables Community National to invest in multiple communities in our assessment area. This is a win-win for our communities and individual businesses,” said Mark Miller, chief financial officer for Community National Bank and Trust, which is headquartered in Chanute. 

Kansas banks are critical to the success of small businesses in Kansas, according to Steve Radley, president and chief executive officer of NetWork Kansas.

“Our work with the Kansas Bankers Association is designed to ensure banks are recognized and rewarded for their Community Reinvestment Act work in communities,” Radley said. “In addition, in 2019 we worked with the Kansas Bankers Association (KBA) to ensure bank eligibility for the entrepreneurship tax credit.”

“We were pleased to lead efforts so that banks across Kansas could support efforts to provide technical assistance and gap funding to businesses in their area through the entrepreneurship tax credit,” said Doug Wareham, KBA president and CEO. “More than 100 bankers serve on local NetWork Kansas Entrepreneurship Community Leadership Teams whose mission is to develop community entrepreneurial ecosystems.”

Banks and other funders interested in more information may call 877-526-8600 and ask for Radley or visit External Linkhttps://www.networkkansas.com/  to learn more. Or, read the NetWork Kansas proposal on the Investment Connection funder site.

For more information on Investment Connection visit: https://www.kansascityfed.org/community/investmentconnection

Author

Ariel Cisneros

Senior Advisor

Ariel Cisneros is a Senior Advisor at the Federal Reserve Bank of Kansas City—Denver Branch. Cisneros focuses on the community and economic development informational needs of ban…