Caro Earns NCUA Grant to Extend Microbusiness Lending to Underserved

Caro knows small business, and the credit union also knows that many startups and those with independent side gigs use their personal finances and credit to fund their businesses. Often this is because the loans they need are of no interest to most business lenders, according to Caro CEO Anne Shivers.

“We want to make a difference in people’s lives,” Shivers explained. “If we’re fighting for the business, then we’re just another financial institution to them.” Instead, the $112 million Caro is focused on business loans of $250,000 to $750,000 to fill this underserved niche, and it’s looking to make microbusiness loans as well.

Shivers noted that there are many reasons to start a business, including people who’ve been released from jail and are having a difficult time finding a job or veterans who want the freedom of running their own business. Caro, a certified Community Development Financial Institution, plans to use the NCUA grant to upgrade its MeridianLink platform to handle all the necessary documentation for the microbusiness loan applications.

Shivers added that a single pickup truck and some landscaping equipment can quickly grow into needing equipment for multiple crews, necessitating business loans that aren’t large of enough for most business lenders to care about. Caro knows this is happening because it commissioned a study on small business lending in Columbia, S.C. The study found that minority businesses were 10% to 15% more likely not to apply for loans because of “credit discouragement.” Additionally, the research cited a Federal Reserve study, which determined 64% of black business owners who applied for credit received it versus 80% of white business owners.

“Caro and Anne think outside the box and push themselves to find opportunities and identify their relevance for their communities,” Your Marketing Co. CEO Bo McDonald said. “These are the credit unions Your Marketing Co. lives to serve. Together I know we can truly change lives.Anne and many other boutique credit union leaders show us that every day.”