11/19/24
Impact investing involves making investments for positive social results.
The positive impact we seek will be realized more quickly and with greater outcomes if we work together.
Collaborative capital enables us to combine individual resources, multiplying our collective impact.
First Southwest Bank is a community development financial institution, or CDFI, a designation earned from the US Treasury that holds us responsible for providing access to banking and capital for all members of our communities. We are one of only two CDFIs in Colorado. As a CDFI, we have access to funding that traditional banks do not, allowing us to harness capital from diverse sources—federal, state, private, foundation, family offices, and organizations like some of yours—amplifying our reach and effectiveness.
With six branches across South central and Southwest Colorado: Saguache, Center, Alamosa, Cortez, Durango, and Pagosa Springs, and nearly 100 employees, we're deeply rooted in the communities we serve and work to drive economic growth and community development.
We track our success by measuring collaboration between First Southwest Bank and our non-profit partner, First Southwest Community Fund, using a leverage ratio.
As of October 31, of this year, our leverage ratio stood at 4.16%. This means every dollar of collaborative capital we invest generates $4.16 in additional impact through market-rate debt or other equity sources.
In total, this leverage brought $23 million in collaborative capital toward a $96 million investment across 319 local businesses.
Here's what we've learned: collaborative capital projects require front-end expertise—someone who can guide business owners through the complexities of lending and grants.
Take Salina Pacheco, for example. She saw the lack of garbage pick-up options in her community and decided to fill that gap by launching her own trash collection service, S&S Pickup. She even painted her trucks pink to stand out.
Photo: Salina's grand opening for S&S Pick-Up
The challenge Salina faced in accessing the funding she needed to launch her business was having too many experts handling different parts of the capital process. Salina had to provide sensitive information to multiple people, each managing their own piece of collaborative capital. This led to duplication, delays, and confusion about repayment terms and program specifics.
Many business owners face the same challenge.
These business owners needed a streamlined process where one expert managed and leveraged all capital sources on behalf of the borrower—someone who knows the community, understands the unique needs of the business, and can amplify the impact of collaborative capital.
First Southwest Bank created HelloBello, a proprietary fintech solution, to accomplish this.
HelloBello enables a single lender at a bank to efficiently pool and maximize collaborative capital. It provides a decision tree that guides local lenders through the process, helping them leverage multiple funding sources to support their borrowers.
First Southwest Bank, together with First Southwest Community Fund, and HelloBello, can turn vision into impact and transform communities. We are ever seeking opportunities to leverage our expertise and authentic community relationships while helping our funding partners mitigate risk and access new markets with competitive financial returns. Please reach out to me to learn more about our work and explore opportunities for impactful collaborative impact partnerships!
Eric Guttormson, Sr. Lending Officer, First Southwest Bank