Filling a capital void: AltCap builds capacity, momentum after its busiest year to date

Editor’s note: The following story is sponsored by Academy Bank, a Kansas City based community bank, and is part of a series of features spotlighting some of the bank’s startup and small business partners.

The past 18 months have been a critical turning point for AltCap, said Ruben Alonso, as the nonprofit has grown to leverage its services at a time when they’re most needed. 

“With COVID, we definitely stepped into a very critical role in terms of supporting small businesses as they were dealing with the impacts of the pandemic,” shared Alonso, who serves as president of AltCap. “We created a $5 million COVID relief and recovery fund for small businesses, and were able to use that $5 million to provide immediate and flexible loans.”

Click here to learn more about AltCap.

With AltCap facing its biggest year in terms of activity and impact, the nonprofit agency turned to partnerships to raise the relief fund, Alonso detailed. One of the first contributors to the fund was Academy Bank.

“When Ruben called asking for Academy Bank’s participation in the fund to help local businesses shut down from the pandemic, it was a no-brainer,” said Paul Holewinski, CEO Academy Bank. “At the time, Academy Bank was right in the middle of the initial wave of PPP applications and utilizing its digital capabilities to develop an on-the-fly, automated approval process that enabled the bank to provide capital to more than 2,300 local businesses. Providing capital to AltCap was a way for Academy to leverage resources and accelerate funding to help businesses survive, and we were proud to contribute.”

The support proved a good example of how banks and CDFIs can collaborate to bring more capital to communities and small businesses, Alonso said.

“… It’s sad that we had our best year during a pandemic, but a lot of CDFIs are most successful when economic conditions are very difficult,” he continued. “I think we’re really excited to take our capital deployment strategy from this past year to other communities and support more small businesses.”

While it’s not officially part of AltCap’s current strategy, the organization has the potential to expand its geographic footprint throughout the Midwest, Alonso said. 

“There’s a really big void in the Heartland for high-performing, high-impact CDFIs like AltCap,” he said. “We want to be able to step in that void and reach more communities.”

Throughout the COVID-19 pandemic, AltCap has also been a provider of PPP loans — providing nearly $7 million to about 500 local small businesses. 

“Again, we had great partnerships and worked with some local CPAs and accountants to provide technical assistance to small businesses who needed help navigating the application process or understanding the rules and regulations around PPP,” Alonso explained. “I think it was a really big opportunity for us to demonstrate our ability to be responsive to the current needs of our community. … It was really intense, but it was definitely worth it.” 

Move to Troost Village

As a CDFI, AltCap is a part of the New Markets Tax Credit Program — which has allowed the nonprofit operation to finance almost $250 million in catalytic investment projects in the Kansas City metropolitan area, Alonso said. The Troost Village redevelopment is one of those projects.

“Our goal with that tax credit program was to essentially support investments that are creating jobs, providing livable wages with those jobs [and/or] creating community facilities that are providing services to low income residents,” Alonso shared.

“… Troost Village is an example of the type of projects we are actively identifying to support with these tax credits,” he continued. “It is going to be a very transformational project for bringing in businesses, retailers and services to the community; and it will hopefully stimulate more investment in the area as well.”

True believers of the project, AltCap itself is set to move its offices into the Michaelson — a historic building along Troost Avenue that is included in the redevelopment.

“We are moving into the second floor of the Michaelson building and are excited to be in a space that can accommodate all of our needs and our staff; we have grown a lot in the last couple years,” Alonso noted. “We are also looking forward to being on Troost and being more accessible to the community who we are trying to serve.”

Click here to read more about the Troost Village development project.

For the rest of 2021, AltCap aims to continue supporting the new relationships with partners and small businesses that have developed over the past 18 months, as well as invest in its own operational infrastructure.

“We are anticipating another big year next year,” Alonso said. “We need to continue to build our capacity, so that we can serve more small businesses and serve them more effectively. We are getting ready, so that we can hit the ground running in 2022.”