Our History

On May 25, 1986, Sister Marie Luisa Vasquez joined an estimated 6.5 million Americans in the coast-to-coast “Hands Across America” charity event, linking hands to fight hunger and homelessness. In New Mexico alone, over 200,000 people participated in this human chain, which ultimately raised $34 million nationwide for anti-poverty causes. The dramatic spectacle inspired Sister Marie and local faith leaders with a bold idea: instead of one-day charity, create a lasting solution to poverty. In its aftermath, the New Mexico Conference of Churches secured a grant from the Hands Across America fund to explore ways to alleviate poverty in the state. This moment became the spark that ignited the formation of The Loan Fund, planting the seed for a new, community-driven loan program to help low-income New Mexicans help themselves.

In 1987, New Mexico earned an unwelcome distinction as the poorest state in the nation, ranked #1 in U.S. poverty. Alarmed by this crisis, a diverse coalition of faith and community leaders began meeting under the New Mexico Conference of Churches to seek long-term economic solutions. Catholic sisters, pastors, and civic activists all came together in this task force, sharing first-hand stories of hardship from across the state. Their goal was ambitious and human-centered: to move beyond charity and “promote peace and justice” by empowering people economically. These 1987 discussions, fueled by frustration at being “Number One” in poverty and hope for change, laid the groundwork for a new kind of non-profit lender that would serve those whom banks overlooked.

After two years of planning, the New Mexico Community Development Loan Fund was officially incorporated in 1989 as a nonprofit alternative lender. It was one of several initiatives launched that year by the state’s churches to combat poverty, alongside a new food bank (Second Harvest), affordable housing programs (Habitat for Humanity and Encino Houses), and a free community store. The fledgling Loan Fund received its first investment from the Adrian Dominican Sisters in 1989, reflecting the deep faith-based support behind its mission. A volunteer board of directors – including Sr. Marie Luisa Vasquez – was formed to guide the organization, and its first executive director was hired to lead day-to-day operations. With a modest pool of capital and a bold vision of “giving people a hand up instead of a handout,” The Loan Fund opened its doors, ready to finance the dreams of low-income entrepreneurs across New Mexico.

The Loan Fund’s impact began immediately: 1990 saw the organization make its first six loans to local projects and small businesses. The very first loan, a $3,000 microloan to the Tierra Madre Organic Garden in rural Ojo Caliente, enabled a group of nuns and community members to start an organic farming venture. Other early borrowers included an Albuquerque fair-trade shop (Peacecraft), a youth arts program (Working Classroom), and several nonprofit housing groups in Santa Fe and Albuquerque. Remarkably, despite New Mexico’s difficult late-80s economy, four of those first six client organizations survived and continued serving their communities decades later. By the end of 1990, The Loan Fund’s lending capital had grown to $350,000 – a small but significant start, proving that formerly “unbankable” borrowers could succeed when given a chance.

As it grew, The Loan Fund became not just a lender but a leader in economic justice. In 1993, it took the lead in Albuquerque’s “Pocket of Poverty” Community Reinvestment Act campaign, pressuring commercial banks to do more for low-income neighborhoods. The Loan Fund organized residents and partnered with city officials, and their efforts paid off: that year First Security Bank and Norwest Bank committed $5.5 million in new lending earmarked for Albuquerque’s poorest areas. Internally, 1993 was also a year of capacity-building – the organization hired its first full-time loan officer to manage a growing portfolio, and its revolving loan pool surpassed $1 million for the first time. These developments meant The Loan Fund could serve more clients than ever. By spearheading advocacy that moved millions into underserved communities, the tiny nonprofit proved its voice was as powerful as its financing, ensuring that banks joined in the effort to revitalize New Mexico’s “pockets of poverty.”

By the mid-1990s, The Loan Fund was expanding both its services and its resources. In 1995, it established an in-house Technical Assistance Department, recognizing that many aspiring entrepreneurs needed training and coaching along with capital. Loan Fund staff began providing workshops on business planning, bookkeeping, and financial literacy, often traveling to rural villages to reach people who had never had access to such support. That same year brought an infusion of funding that dramatically boosted the Loan Fund’s lending capacity. The City of Albuquerque awarded a $600,000 Urban Development Action Grant to The Loan Fund, aimed at spurring business growth in the inner-city “Pocket of Poverty” area. Even more transformative, the Ford Foundation, one of the nation’s largest philanthropic institutions, provided $1 million in program-related investment funds to The Loan Fund in 1995. These major investments were a vote of confidence in the Loan Fund’s mission. Armed with new capital and new technical assistance programs, the organization could empower far more low-income New Mexicans to start businesses, create jobs, and build community wealth.

Originally based in Albuquerque, The Loan Fund began extending its reach to other parts of New Mexico. In 1996, it opened its first satellite branch office in Roswell, a joint effort with the Women’s Economic Self-Sufficiency Team (WESST) to serve the state’s southeast region. This move recognized that entrepreneurs in smaller cities and rural areas also needed access to financing. From the new Roswell office, Loan Fund staff could provide loans and technical help to towns like Artesia, Carlsbad, and communities across the agricultural Pecos Valley. The Roswell branch marked the beginning of The Loan Fund’s truly statewide presence. No longer would distance from Albuquerque be a barrier for determined business owners seeking capital. By planting a flag in Roswell (and soon other locations), The Loan Fund showed its commitment to every corner of New Mexico, bringing opportunity to places often overlooked by mainstream lenders.

By 2001, The Loan Fund was actively expanding services to underserved populations such as Native Americans and nonprofit organizations. That year, it opened a satellite office in Gallup, on the edge of the Navajo Nation, to better serve Navajo and other Native entrepreneurs in western New Mexico. The Loan Fund also partnered with Laguna Pueblo in 2001 to jump-start Native-owned businesses: it matched $200,000 of its funds with $100,000 from Laguna to make the very first loan to a Laguna Pueblo member enterprise, a traditional jewelry and gift shop called Turquoise Lady in Albuquerque’s Old Town. At the same time, the organization broadened its mission to include nonprofit groups as key borrowers, recognizing their role in community development. A two-year pilot project (the Las Colonias/Dream Team initiative) brought expanded technical assistance to communities in southern New Mexico, and in 2001 alone, The Loan Fund made 15 loans (over $558,000) to nonprofit organizations working in low-income areas. These steps deepened The Loan Fund’s impact in communities of color and high-poverty regions, affirming that economic opportunity should extend to all New Mexicans, not just those in the metro areas.

2002 was a breakthrough year that validated The Loan Fund’s model on a national level. The U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund awarded The Loan Fund a $1 million investment grant in 2002. This substantial capital injection (the first federal funding in the Loan Fund’s history) was a strong endorsement, effectively saying that New Mexico’s little loan fund had become a CDFI worthy of federal support. Private sector partners stepped up as well: in 2002 Bank of the West and the Dakota Foundation became first-time investors in The Loan Fund, joining the mission of lending to the underserved. With new funds to deploy, The Loan Fund’s lending hit new highs – that year it made 79 loans totaling over $2.78 million, more than doubling the dollar volume from just two years prior. These loans helped dozens of minority and women business owners launch or expand ventures across the state. What began as a church-sponsored idea was now a respected CDFI, blending public and private support to channel millions into New Mexico’s economic grassroots.

In 2004, The Loan Fund forged crucial public-private partnerships that boosted its capacity to serve small businesses. The newly created New Mexico Small Business Investment Corporation (NMSBIC) approved its first investment in The Loan Fund, committing $1.5 million in low-cost lending capital. This partnership meant that state dollars (generated from New Mexico’s Severance Tax Permanent Fund) would flow into community loans through The Loan Fund, greatly enlarging the pool of funds available to borrowers. At the same time, the U.S. Small Business Administration awarded The Loan Fund a specialized $150,000 PRIME grant to expand training and financial literacy outreach in two underserved areas: the colonia communities of Doña Ana County and several Native American reservations. In response, The Loan Fund’s Technical Assistance staff logged over 1,600 hours in 2004 working directly with clients – holding workshops on budgeting and credit for low-income entrepreneurs, and even developing a custom financial literacy curriculum for participants in Individual Development Account (IDA) savings programs. By the end of 2004, The Loan Fund had become a statewide engine for both lending and education, backed by state investment and federal support, and more capable than ever of fostering small business success in New Mexico’s most marginalized communities.

In 2007, The Loan Fund’s influence extended beyond its own lending as it began mentoring emerging community lenders and solidifying key local partnerships. That year, The Loan Fund signed a memorandum of understanding to guide and train the founders of Bik’eh Hozho, a new loan program for Navajo-owned small businesses in Tuba City, Arizona. By sharing its expertise with Navajo Nation leaders, The Loan Fund helped plant the seeds for a sister CDFI across the state line, reflecting a spirit of collaboration and cultural respect. Back in New Mexico, the City of Santa Fe renewed its contract with The Loan Fund in 2007 to continue managing Santa Fe’s Small Business Development Loan Fund (which The Loan Fund had been running since 2003). By this point, the Santa Fe fund had issued 48 loans totaling over $850,000, helping create or retain 169 jobs in the capital city. The year also brought more growth capital: NMSBIC extended an additional $2 million to The Loan Fund, bringing the state’s total investment to $3.5 million for lending in New Mexico. On the eve of an economic downturn, The Loan Fund had positioned itself as a resilient, multi-faceted partner, mentoring native entrepreneurs, managing local government loan programs, and marshalling public dollars, all in service of its mission to uplift New Mexican communities.

2008 proved to be a milestone year in both funding and visibility for The Loan Fund. As the organization continued lending through an unfolding credit crisis, the New Mexico SBIC bolstered its commitment with another $2 million investment, bringing SBIC’s total capital infusion to over $5 million and making The Loan Fund its single largest alternative lending partner in the state. This substantial backing during turbulent times enabled The Loan Fund to keep credit flowing to small businesses when many banks pulled back. Additionally, The Loan Fund stepped onto the national stage in 2008 by co-hosting the Opportunity Finance Network’s annual conference in Albuquerque, a gathering of CDFIs and community lenders from across the country. Hosting this prominent industry event showcased New Mexico’s success in community development finance and allowed The Loan Fund to share strategies with peers nationwide. That same year, The Loan Fund also began publishing free small-business advice columns through Finance New Mexico, with practical tips ranging from cash-flow management to marketing; these articles were picked up by over 30 newspapers around the state, amplifying the organization’s educational outreach. In the midst of the Great Recession, The Loan Fund shone as a beacon of innovative finance, supported by robust state investment and recognized as a leader in the national CDFI community.

As the Great Recession hit full force in 2009, The Loan Fund became a lifeline for many struggling businesses, and marked two decades of service. Traditional banks were freezing credit, but The Loan Fund nearly doubled its lending, making 85 loans totaling almost $6.5 million in 2009 (a record volume for the organization). This counter-cyclical lending reinforced The Loan Fund’s role as an “economic shock absorber” for New Mexico, stepping in as a “financial doctor” to keep small businesses afloat during the crisis. To better target its efforts, The Loan Fund collaborated with University of New Mexico researchers to develop a socio-economic survey tool for rural micro-entrepreneurs, funded by a CDFI innovation grant. It also launched a USDA-backed pilot project to test new ways of delivering technical assistance in remote northern communities. In October 2009, amid these initiatives, The Loan Fund hosted a 20th Anniversary celebration at the Albuquerque Museum, reflecting on its journey since 1989. At the event, the creation of the Sister Marie Luisa Fund was announced – a new fund dedicated to continuing the vision of the beloved founding board member who had championed “helping people help themselves”. More resources soon followed: the state’s SBIC approved a generous $7.5 million line of credit to expand lending capacity, bringing SBIC’s five-year contribution to $13 million. By the end of 2009, The Loan Fund had reached an impressive milestone: 1,000 cumulative loans made since inception, totaling $34 million and over 5,100 jobs created or preserved in New Mexico. In a year of economic despair for many, The Loan Fund not only endured but grew, proving the resilience of its model and celebrating the community spirit that had fueled 20 years of grassroots economic development.

In 2010, The Loan Fund built on its recession-response momentum by adding new lending programs and hitting all-time highs in impact. Over the previous 21 years (1990–2010), the organization had made more than 1,300 loans totaling $41.5 million, directly helping to create or retain about 6,000 jobs for New Mexicans. Its active loan portfolio now exceeded $11 million, a testament to both the demand for its services and the high 97% repayment rate maintained by its borrowers. In 2010, The Loan Fund earned designation as the Small Business Administration’s newest micro-lender in New Mexico, giving it access to SBA capital and guarantees to extend more microloans to startups. In fact, it received a first-ever $750,000 SBA PRIME award (via the CDFI Fund) specifically to boost lending to very small businesses recovering from the downturn. That year The Loan Fund also entered into a partnership with Bernalillo County to manage a new $1 million countywide revolving loan fund for small businesses, a fund jointly capitalized with $500,000 from the county and $500,000 from The Loan Fund’s own reserves. Additionally, 2010 saw The Loan Fund begin making SBA 504 loans (for commercial real estate and equipment purchases) for the first time, opening another avenue to help local businesses grow assets. With a diversified toolbox of loan products and deepening public partnerships, The Loan Fund closed 2010 stronger than ever: a 21-year-old institution still driven by the same mission, yet constantly innovating to meet the evolving needs of New Mexico’s entrepreneurs and nonprofits.

By 2011, The Loan Fund’s sustained efforts over a quarter-century had produced a remarkable cumulative impact. The organization reached a new high-water mark of over $43 million in total loans made since inception, a figure almost unimaginable back in 1989. Those loans had touched every corner of New Mexico, from big cities to Indian Country, and supported thousands of individuals in building better lives through business and community projects. The Loan Fund had firmly established itself as New Mexico’s most experienced and people-focused alternative lender, all while staying true to its founding ethos of compassion and self-help. As Sister Marie Luisa, the guiding light of its early years, often said, the goal was “giving people a hand up instead of a handout.” The results by 2011 showed that philosophy in action: entrepreneurs who once had nowhere to turn were now running successful enterprises, nonprofits were expanding services, and jobs were being created in areas long written off by traditional finance. Looking ahead from 2011, The Loan Fund faced the future with a professional yet warm approach, knowing that its mission was more relevant than ever amid ongoing economic challenges. With deep gratitude for the partners, funders, and clients who had shaped its first 22 years, The Loan Fund prepared to write its next chapter – continuing to prove that local communities can thrive when given fair access to capital and faith in their potential.

After more than two decades dedicated to empowering entrepreneurs and nonprofits across New Mexico, Norma Valdez retired in 2014. Her 21 years at The Loan Fund saw her build deep relationships, help launch countless businesses, and provide crucial support to those underserved by traditional banks. Her legacy is one of compassion, diligence, and personal investment in client success.

The U.S. Small Business Administration singled out The Loan Fund as one of America’s Top 25 Microlenders in 2015, praising its high repayment rate and its knack for serving entrepreneurs banks overlook. For staff in Albuquerque, the award validated long nights spent tweaking tiny loan packages that made a huge difference to a farm-to-table baker in Taos or a daycare center in Sunland Park. The accolade also sparked new bank partnerships inside New Mexico, unlocking fresh lines of capital that would soon be recycled into neighborhood businesses.