One of Westwater Financial’s primary goals is to provide access to capital by providing flexible lending services. Westwater began lending and providing supporting economic development services in 2013. We offer consumer loans, credit builder loans, and emergency loans (an alternative to PayDay loans), microenterprise loans, and small business loans, to Native Americans in our target market area of Sonoma, Mendocino, and Lake Counties in Northern California. To complement our loan products, Westwater also offers financial skills training, business training and consulting, and one-on-one credit coaching.
Lack of cash flow, insufficient collateral, and weak credit histories have long prevented our clients from being able to access business and consumer loans through traditional lending institutions. Recent changes in the banking industry and small business lending environment have made it almost impossible for many Native Americans to obtain reasonably priced and appropriate capital for their businesses and consumer needs. The banking industry has tightened up considerably since the nation-wide financial crisis. As a result, there has been a significant decline in the level of small business lending in California. It is through our programs that we will endeavor to address these issues.
Description of Financial Products
Westwater Financial offers microenterprise, small business, and consumer loans to its clients;
Microenterprise loans ranging in size from $500 to $5,000 are made to small start-up or existing businesses that need working capital, inventory or equipment. Proceeds of the loan may also be used to refinance high-interest business debt. Terms for microenterprise loans range from 6 months to 5 years, with fixed interest rates of 6-8%. These loans amortize with a fixed principal and interest payment. A loan origination fee of 1% is charged and all direct loan costs such as credit reports and lien filings are directly passed through to the borrower at closing.
Small Business loans ranging from $5,000 to $10,000 are made to existing businesses for the purposes of working capital, purchasing inventory or equipment, refinancing of high-interest debt, or the purchase of an existing business. Loan terms range from 1 to 5 years with fixed interest rates ranging from 6% to 9% depending on the risk factors of the loan. A loan origination fee of 1% is charged and all direct loan costs such as appraisals, credit reports and lien filings are directly passed through to the borrower at closing. Please see the forms below for additional information or requirements. Westwater offers to clients the ONABEN Indianpreneurship program to guide your business growth as part of a complete ‘package’ of service.
Consumer and Credit Builder loans are available to tribal members ranging from $500 to $5,000 for Credit Builder Loans and $500 to $5,000 for Consumer Installment Loans (as allowed by available lending capital). Loan proceeds may be used for consumer or emergency needs or for credit building purposes. Interest rates range from 8% to 10%. The term on a consumer loan ranges from 6 to 60 months, while the term on a credit builder loan ranges from 6 to 48 months. In certain cases, an applicant may be required to receive credit coaching or complete a financial literacy class before receiving a loan. Borrowers who complete a financial literacy course will receive an interest rate of 8%; those who do not complete the course will receive an interest rate of 10%, and may also not be eligible for the loan. Westwater Financial requires tribal members’ per capita payments as security for the loan. There is a loan fee of $50 ($25 for Emergency Loans). Credit builder loans are used to help clients establish credit or rebuild poor credit histories and are tied to financial literacy training and credit coaching. Clients applying for a consumer loan are required to fill out a simple Credit Builder Application and Consumer Information Form (See Forms below).
For consumer loans, Westwater Financial in all cases accepts per capita payments as collateral, something for-profit financial institutions are not willing to do. Our consumer loans are also priced much lower than a credit card or other sources of consumer loan financing our clients typically use (e.g. payday lenders and pawnshops). Reasonably priced consumer loans without predatory fees help our low-income clients both repay their loans and build their credit, which opens up access to other forms of reasonably priced credit in the future.
Access to credit helps our clients build a stronger financial foundation so they can eventually achieve financial success. Credit scores now drive so many things in the financial world. A strong credit history not only helps clients qualify and receive better pricing for purchases like cell phones, rent, mortgages, car loans, etc., it also helps them build the financial base so that they can consider starting a business. Please call Dani Doris, Loan Officer, for further information or assistance at (707) 419-3070, or by e-mail at DaniD@westwaterfinancial.org.