ASSETS CEO has a vision for regional expansion
Jaime Arroyo’s initial career goal was to do well in the financial services industry. Son of Puerto Rican immigrants, he was the first person in his family to attend and graduate from college. He worked in the banking industry for a decade. “I thought I had my career pretty much set as far as, you know, where I was going to go. I had a great professional job at an office,” he said. “I was doing very well financially.” But that work exposed him to “the barriers that existed for folks from our (Puerto Rican) community to actually access capital.”
Lancaster County, Pennsylvania, is likely most well-known for its Amish farmers and the surrounding tourist industry. But the city of Lancaster is also the most welcoming to newcomers of any place in the US. It has the highest refugee and immigrant resettlement per capita in the country. More than 30 percent of the city’s population is of Puerto Rican origin.
Arroyo’s first exposure to the ASSETS organization came when Jess King, who headed ASSETS at the time, tried to recruit him. “I wasn’t quite sure about the nonprofit life, coming from banking… but you know what, I’ll volunteer,” he recalls saying. He spent a year helping with learning circles. The circles are a 10-week cohort training exercise in business plan development for new entrepreneurs. “After that, I just fell in love with the mission.”
In 2017, a few months after telling King that he would be interested in any position that opened up, he joined ASSETS. His job was leading a community lending department, focusing on microloans of between $1,000 and $50,000. The lending program also provides technical assistance, including credit counseling and financial coaching for women and black, indigenous, and people of color (BIPOC) entrepreneurs. At the end of 2019, Arroyo left ASSETS to become chief strategy officer with Community Action Partnership, Lancaster’s largest anti-poverty organization.
When ASSETS was looking for a new CEO in 2022, Arroyo applied and was offered the job. “I’m looking forward to help lead ASSETS not only deeper into Lancaster County but actually become a regional organization as a micro-lender and as a CDFI (community development financial institution).” CDFIs are financial institutions that provide credit and financial services to underserved markets and populations. The US Department of the Treasury provides funding to CDFIs through a range of programs.
Achieving Arroyo’s goal of offering services regionally will require a shift in mindset at ASSETS. He said the organization will need to think like the entrepreneurs it serves and how it can become self-sufficient. “Part of that is generating revenue, thinking like a social enterprise.”
ASSETS programs were available in other areas of Pennsylvania more than 20 years ago. A Fall 1999 article in MEDA News cited ASSETS programs in Harrisburg and Norristown as well as Lancaster. ASSETS currently has two main loan products. Its small business loan offers between $1,000 and $10,000 for up to 36 months. This product has an eight percent fixed interest rate. It also differs from what is offered by conventional banks. Businesses don’t have to demonstrate a two-year track record or a specified credit score.
ASSETS provides credit counseling and financial coaching. Its goal is that after repaying the loan, an entrepreneur will be prepared to work with a traditional financial institution to access larger amounts of capital to grow their business. The second ASSETS product, which Arroyo developed in 2018, is an impact loan, offering between $10,000 and $50,000. Applicants need to demonstrate a commitment to “the triple bottom line, people, planet, and profit for their businesses,” he said. “We want to make sure that they’re measuring, they’re measuring and improving their social and environmental performance.” Clients who achieve specified milestones are rewarded with an interest rate discount.
These loans typically have terms of between 12 and 60 months, are fully open, and repayable without penalty. Arroyo said ASSETS currently has about $100,000 in outstanding loans, with about $600,000 available for additional loans. Its average loan size is under $5,000. People seeking that size of loan are often looking for equipment they may need to open a restaurant or renovate a food truck. Other common needs include catering supplies and equipment or working capital to hire staff during a busy season.
A third lending product, ASSETS’ Reimagining Our Community loan, allows people who started a business before or during the pandemic to apply for up to $10,000. “It’s meant to assist or give a boost for recovery.” The new loan product has two unique features. After the borrower makes a loan payment, ASSETS will forgive up to 30 percent of the remaining principal as a grant. Second, the product has a one percent fixed interest rate. “The intention is, we need to give our small businesses a boost to recover from the pandemic.”
Borrowers do have to demonstrate a credit score of 620 or higher. “But if they don’t qualify for that loan, we don’t turn them down. What we can do is then direct them to the small business loan, which doesn’t have a credit score requirement.” Many successful business leaders are now realizing that as women and BIPOC business owners are able to grow and scale their businesses, it will help everyone else thrive as well, says Mike Mason, ASSETS chief program officer. “Our economy will get better and will get stronger if more people have the opportunity to grow and thrive,” he said.