Local Dollars & Sense

PO Box 1782, Sequim

localdollarsandsense@gmail.com

Paying it forward — that’s the premise behind the formation of an investment club, Local Dollars & Sense, by a group of Clallam County residents.

Having done well in their careers, the members wanted to make a difference to local small businesses by offering low-interest loans and approving loans for lesser amounts that banks wouldn’t consider.

Karen Westwood, a retired investment banker, said the like-minded for-profit group wanted to do something more interesting with their resources, so they pooled their money, each chipping in $10,000 and funding the club in March 2015.

Other members are Peter Jepsen, Sarah Miller, Ed Chadd, Kevin Gibson, Suzi and Jim Schuenemann, Gerry and Gigi Christensen, Betsy Wharton and Robert Epstein, Carrol Hull and Alan Clark. Couples are counted as one voting member.

“Originally, we wanted the focus to be on agriculture and that’s still very much our interest, but we haven’t had an agriculture borrower run across us yet,” Westwood said.

Loans in action

“We’ve made three loans so far to Clallam Bay’s Sunsets West Co-op for a new refrigeration unit; Sequim Spice and Tea so it could move to a larger space and start a tea room; and Sequim’s Little Explorers Early Learning Center for remodeling to meet state requirements. What was interesting was that one was done with Craft3 because it was too big to do by ourselves,” Westwood explained.

Craft3 is a nonprofit community development financial institution lender serving Pacific Northwest communities.

In no particular order, the three loans were made for $3,500, $4,500 and $20,000 at an interest rate of 5 percent over a payback time of three years.

“It’s definitely a labor of love — nobody is getting rich from it,” Miller said. “This is about growing partnerships and growing the community. It’s not about making lots of money.”

Westwood agreed, adding, “We don’t expect any income for a few years. We’re not really in this to make money (from interest), just enough return to cover our costs. We want an income so we can lend to more people.”

Summarized, the club’s guiding principles are to create opportunities to build prosperous local businesses; to support small to mid-sized producers, processors, distributors and retailers supporting the sustainable use of locally sourced materials; and to invest in Clallam County communities so they prosper.

Forging partnerships

For club members, forging a connection with prospective borrowers is as important as their business plan.

“The first thing is we look at the borrower — we’ve got to like them and develop a personal relationship with them,” Westwood said. “Secondly, we look at their business plan and ask, ‘Does the business plan make sense and is it something that’s going to work here?’ If we trust and like the borrower and it’s a good idea, then we talk about a loan with them. We act with them as partners and offer low-interest loans because most don’t have a lot of resources. We’re effectively subsidizing their business.”

Personal rewards

The rewards club members receive go far beyond money, the pair indicated.

“For me, I want to walk my talk,” said Miller, who retired from Seattle PUD and is a newcomer to Sequim. “They say you can tell what a person values by their calendar and checkbook. I do value giving back to the community and understanding the community. It’s an agricultural and logging area, so how do I learn about them and connect with them?”

Saying she has an “environmental slant” in her interests, Miller has jumped in to volunteer with Streamkeepers, the North Olympic Land Trust, the New Dungeness Light Station Association and Washington Trails Association.

“It’s very fun to sit down and talk to small businesses that the banks won’t lend to. We talk to them and they get super-excited — it’s so much fun!” said Westwood.

“We can put a gleam in their eye,” added Miller.

Local Dollars & Sense also relies on the expertise of other entities, such as the Clallam Opportunity Investment Network, Center for Inclusive Entrepreneurship and the North Peninsula Small Business Development Center and its certified business advisor Kevin Hoult.

“Kevin puts their dreams in action,” Miller said.

“With one of our loans, we have the owner meet monthly with Kevin to prevent trouble down the road,” Westwood said. “We’ve found that business owners don’t know the regulatory issues, tax issues and employee issues and Kevin shows them how to protect themselves.”

And the bottom line?

“Ideally, the owner can hire somebody, source and sell locally to improve the sustainability of the community,” Westwood said. “We really do love where we live and we want to make it a stronger and more vibrant community.”

To inquire about a loan from Local Dollars & Sense, email localdollarsandsense@gmail.com.