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Colorado Enterprise Fund outlines Adams County lending impact and launches childcare loan program
Summary
Colorado Enterprise Fund told Adams County commissioners it has helped 233 county businesses and originated about $13.7 million in loans from county-backed pools and outlined a new childcare lending program backed by a $1 million guarantee from Gary Community Ventures to unlock up to $10 million in lending for childcare providers.
Nim Patel, chief operating officer of the Colorado Enterprise Fund, told Adams County commissioners the nonprofit has quietly used county-funded revolving loan capital to support hundreds of small businesses across the county and the state. Patel said Adams County contributed $1.335 million to the county'backed loan pool, which the fund matches with other capital to provide a community loan fund now totaling more than $4.2 million.
Patel said the county partnership has helped 233 Adams County businesses with $13.7 million in loans and supported or created an estimated 1,800 jobs since 2016. Active portfolio metrics include 94 loans with a current loan balance near $5 million; Patel said the fund's average loan size has grown from roughly $35,000 pre-pandemic to about $150,000 as it shifted into larger loans and federal guarantee programs.
Why it matters: County leaders heard that the fund's mission is not to keep borrowers as permanent customers, Patel said, but to move small businesses onto conventional bank financing over time while providing flexible underwriting and free business coaching that traditional lenders frequently do not offer.
In a new program, Patel described a childcare-focused lending pipeline built with several partners: Gary Community Ventures will provide a $1 million guarantee, EPIC (Executives Partnering to Invest in Children) will provide technical assistance, and the Colorado Enterprise Fund will supply loan capital and underwriting flexibility. Patel said the guarantee is designed to backstop the higher credit risk for childcare lending and that a $1 million guarantee could, by his math, unlock roughly $10 million of lending if a 10% default rate is assumed.
Under the proposed products, Patel said working-capital loans for childcare providers would be offered at a discounted rate of about 3.99 percent (compared with roughly 10 percent market rates for small businesses), while commercial real-estate loans would be priced closer to 7.99 percent. The fund also said it can offer 100 percent loan-to-value financing on bank loans for providers in some cases and has used that structure to enable operators to acquire turnkey facilities with little or no equity down.
Commissioners and staff pressed for follow-up details on how guarantees would be structured and what, if any, ongoing county liability would look like. Patel said the fund will continue underwriting based on cash flow rather than hard collateral minimums and that it aims to conserve county loan-pool principal while leveraging other capital sources and federal guarantee programs such as SBA 7(a).
What's next: County staff said they will follow up with detailed portfolio data and with examples of Adams County borrowers, and commissioners asked staff to continue evaluating how local incentives and permitting support could align with the new childcare financing model.
