Renew Indianapolis’ Build Fund Continues Momentum in the Promise Zone and Beyond

The Build Fund recently received an $800,000 grant from the U.S. Department of Health and Human Services’ (HHS) Office of Community Services (OCS) that will address community barriers and improve revitalization efforts by providing technical assistance and loans to businesses in the Promise Zone and surrounding Opportunity Zones. A significant portion of the funds are planned for a food and beverage business located in the Promise Zone. Any remaining funds will be used for businesses in the Promise and Opportunity Zone areas. This specific program, otherwise known as the Opportunity Zone Loan Fund and Job Creation Program, will create 40 full-time jobs from 2021 to 2023 and at least 75% of these jobs – or about 30 – will be filled by individuals living at or below 200% of the federal poverty level. To date, The Build Fund has assisted small businesses in the Near Eastside in creating 84 full-time jobs.

The Build fund, in addition to the Edge fund which provides capital lending for affordable housing projects, are operated by Renew Indianapolis, Inc. (Renew). Renew is a private, non-profit community development corporation with a 30-year history of developing affordable housing and creating economic opportunities by small business lending with loans that range from $100,000 to over $1 million. Through both Build and Edge funds, Renew has leveraged millions of dollars in investment, making the organization an important actor in the successful development of the IndyEast Promise Zone. The Food & Beverage business that is planned to receive the Build Fund investment has received previous funding in 2016 for its current brick and mortar location and within the past five years has expanded to the point that a new location is necessary. This is one example of how Renew, through the Build fund, has been able to support small businesses’ growth creating community assets.

The Build Fund differs from other traditional lending institutions like banks because Build Fund is a nonprofit that targets small businesses creating employment opportunities for low- to moderate-income individuals. Build Funds flexible terms aid small business growth and expansion. In addition, Build generally serves clients that normally do not qualify for financing from banks – due to federal banking regulations. However, rather than simply denying an applicant, Build provides technical assistance to applicants that might allow future successful outcomes. In fact, the U.S. Treasury provides technical assistance funding via the Community Development Financial Institution Fund (CDFI Fund) to Build so that clients, regardless if they apply or receive a loan. This is a service offered free of charge. Build is also a member of NAWBO (National Association of Women Business Owners), maintaining a mutual relationship where members can apply for loan products from Build, and Build can utilize services members provide like environmental review, survey, appraisal, and marketing. In addition, Build has engaged locally with Indy Black Chamber of Commerce and other collectives that focus on small business development and lending. This facilitates productive networking opportunities and supplies an exchange of business resources, ensuring the organization grows its pipeline of partners.

Build often works with newly established businesses, which typically are not at a point to provide living wages, health insurance, and 401K benefits. One of Build’s goals is to lend to a business allowing it to grow and maximize profits, so that eventually the business can fund employee benefits. While not always favorable, Evan Tester (Director of Lending) states “If you’re working in a market with no or little activity, then any market activity is positive”. For example, Evan mentioned a fueling station was left vacant for decades with no market activity and a place banks would not financially assist became a Build lending project – eventually turning the fueling station into new office space and surrounding area into an attractive corner that provides jobs and economic possibility. Renew/Build has often stepped into project sites with environmental issues, turning brownfields into prosperous sites of job creation and commerce.

As COVID-19 continues to cause economic uncertainty, Build has worked with borrowers allowing them to maintain operations during the pandemic. The pandemic’s effects on the retail, restaurant and beverage industry have had disastrous repercussions, pushing the banking industry to tighten lending to these industries. However, Build will review each business lending request on a case-by-case basis and continue to support essential industries like construction. Build will also continue to provide technical assistance to retail, food, and beverage businesses should they need it. Once economic recovery begins, Evan assures “that’s when Build funding shines in a distressed census tract or area. Any kind of economic hurdle or barrier is when Build comes in when banks are unable to”.

This was the first year that preference points were available to an organization applying for OCS funding within Promise Zone and Opportunity Zone areas. The IndyEast Promise Zone continues to support projects and provide assistance in grant applications that align with our goals. The Build Fund is a successful program operated by Renew Indianapolis that improves outcomes not only for Buy IndyEast, but also Work IndyEast, as it serves the expansion of businesses – developing vibrant business activity and turning businesses into neighborhood assets – while also employing Near Eastside residents.

Learn more about the Build Fund at www.buildfund.org