Dollars for your dreams

CDA’s URBANK program makes small-business loans a reality

By Annie B. Kelleher
Contributing editor to CBIA News

Need new equipment? Want to expand your business? Or maybe you have an idea for a business you know could succeed if only you had the funds you needed to turn your dream into a reality. That’s where the URBANK program comes in. 

URBANK is the Connecticut Development Authority’s (CDA’s) urban lending initiative which encourages banks to provide loans to businesses that don’t quite meet standard lending criteria. Begun in 1993, URBANK was founded as a tool to help small businesses get access to the capital they need. 

“URBANK provides a guarantee to a bank,” says John Lobon, senior vice president in charge of URBANK, “which means that the bank is willing to assume more risk than it normally would. What this means is that an individual can see his or her dream become a business reality.”

Similar programs are available in 23 states, but CDA has taken the idea to a new level. “We’re the only program in the United States which brings private banks, a university and a state agency together in order to help the small-business man or woman succeed,” Lobon says. “We’ve guaranteed over 360 loans, which translates into over $27 million dollars.” 

This isn’t just good for business. URBANK helps the towns and cities where the businesses are located. Whenever new enterprises are created or expanded, new jobs and new tax revenues are created as well. In urban areas, these businesses often provide services that would otherwise be unavailable. Everyone benefits: the small business, the bank, the local community, the town and the state.

How it works

“Essentially, URBANK is composed of two programs,” explains David Willis, senior vice president of marketing communications and job training finance. “URBANK Entrepreneurial provides loans up to $500,000 to anyone in any part of the state who wants to start a small business. The other program, URBANK, offers loans up to $500,000 through partner banks to small businesses located in targeted communities.” (For a list of partner banks, go to CDA’s Web site, www.state.ct.us/cda. For the targeted communities, see the box below.)

URBANK Entrepreneurial also provides self-employment workshops, small-business training and one-on-one business counseling through the University of Hartford. “We teach people how to realize their ideas,” says Willis. URBANK loans for existing businesses can provide working capital or the means to purchase machinery, real estate or other equipment that a business needs to expand. “Let’s say a business needs to borrow $50,000 to update and expand their computer systems,” says Willis. “The bank agrees the business needs the equipment, but can’t offer the loan because the business doesn’t meet the criteria the bank requires. This is where URBANK steps in. By guaranteeing the loan, URBANK makes it possible for the bank to agree to assume a greater risk than it normally would. The business gets its updated systems; the bank has its guarantee. In a case like this, everyone wins,” he says. 

“It’s a very painless process,” Lobon adds. “We have less red tape than you can imagine. For loans of less than $250,000, there is no additional credit review beyond what the bank requires. And even larger loans often require only an added step or two.”

CDA has begun a series of regional workshops for anyone interested in learning more about how the URBANK programs work. Contact URBANK directly at 860-258-7800 for more information or to be placed on the mailing list. “We’re here to help,” says Lobon. “We know there are great ideas out there. Turning dreams into reality is our business.” 

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