Andy Posner is the founder and CEO of Capital Good Fund, a nonprofit financial institution that provides residents with small personal loans and car loans. The organization recently received funding through the Small Business Capital Access Program and continues to expand operations outside Rhode Island.
Posner talks with Providence Business News about growth, the recent influx of financing and where the nonprofit is heading in the long term.
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PBN: How much did the Capital Good Fund receive through the Small Business Capital Access Program and what will the funds go toward?
POSNER: We received a $250,000 loan from Centreville Bank for our loan fund, which means that 100 percent of the loan proceeds will be used to make loans to low- and moderate-income individuals and families. The most common reasons for which our clients borrow from us are vehicle purchase or repair, security deposit, immigration expenses, emergencies and technology purchases.
PBN: Can you tell our readers a little bit about what type of success the Capital Good Fund is having with its different products and services?
POSNER: Of course. Since our founding in 2009, we have financed 2,000 loans for $2.8 million with a 95.5 percent repayment rate. What’s more, we have over $1.5 million in loans outstanding, and over 97.5 percent of those are on time. We have also graduated over 1,000 families through our one-on-one financial- and health-coaching program, which walks families through the basics of finance (budgeting, banking, credit, debt, etc.,) as well as health (access to primary care, healthy eating on a budget and the like). We have put out several reports on social impact, including this one.
PBN: How are you expanding those efforts and how goes the fundraising efforts?
POSNER: We are in the midst of an ambitious scaling plan that calls for us to finance 17,000 loans over five years. We are on track, and as part of that plan we began offering loans in Delaware and Florida earlier this year (Florida already accounts for 40 percent of loan volume); doubled loan staff in the past year; and nearly tripled our assets in 18 months. We have also been very successful raising loan capital by borrowing from banks, credit unions, religious endowments, family foundations and individuals. In fact, people can lend us as little as $1,000 and earn as much as 7.5 percent. If interested, potential investors should contact me directly at andy@goodfund.us.
PBN: How has the Capital Good Fund been received in the other states where you’re already operating?
POSNER: Very well. The products we offer are alternatives to very large, powerful and predatory industries. In Florida, for instance, payday lenders charge 278 percent APR on small loans and represent a $3 billion-plus industry. Therefore, numerous stakeholders – nonprofits, foundations, community leaders – are very excited that we are offering a more-affordable alternative, and that is the case with all our loans. In fact, subprime auto lenders are a significant problem in Florida, and once again, we are offering an alternative that is more affordable, convenient and equitable.
PBN: What are your long-term growth and expansion plans?
POSNER: Even though we are a nonprofit, we have set a goal of generating 100 percent of our operating expenses from interest income on our loans by 2021. Because we are a high-volume, low-margin business (meaning: we don’t make a lot of money per loan, so we have to make a lot of loans to generate a lot of revenue), we need to get to a loan portfolio of $120 million to achieve this goal. As part of this scaling plan, we expect to expand to at least one more state, with California, Texas and Illinois being some of the starts we are exploring. Finally, we plan to go from our current 26 employees to 60, creating dozens of jobs in the process.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or you can follow him on Twitter @Eli_Sherman.
