Case Study: Grow Indy Fund II

The Challenge

Business owners in distressed census tracts often struggle to access the capital they need for growth. To flourish and contribute to the economic and social health of their communities, they need flexible, affordable financing that helps them expand their products and services, improve efficiency and create quality jobs.

The Opportunity

The Grow Indianapolis Fund II, or Grow Indy Fund II, is a $10 million loan fund that makes affordable loans to businesses in underserved parts of the city. Broadstreet is the fund manager.

The fund makes loans that range from $200,000-$4 million, so businesses can purchase land, upgrade their facilities, buy new equipment, and assemble working capital. It targets small businesses in need of below-market financing and with a commitment to supporting job growth in the region. It not only helps owners build wealth and employees build incomes, but also contributes to the economic vibrancy of the places where borrowers operate.

Launched in 2020, the fund leverages New Markets Tax Credits (NMTCs) allocated to the Indianapolis Redevelopment CDE to support loans. Along with Grow Indy I, it brings the City of Indianapolis’ NMTC investment initiative to $19 million.

Broadstreet Fund Management

Broadstreet’s fund management team designs, launches, and manages investment vehicles in a highly collaborative and bespoke approach. Our funds invest in impactful businesses, intermediairies, and community assets. With more than $545 million in assets under management, we collaborate with banks, community development financial institutions (CDFIs), foundations, corporations and anchor institutions to develop and deploy impact funds that focus on equity and opportunity throughout the country.

Grow Indy Fund II is one of 17 active funds that Broadstreet is managing on behalf of investors. The fund focuses on expanding small businesses, creating good jobs, improving community health, supporting quality housing and fueling broad economic development strategies. To date, Grow Indy Fund II has supported investments that revitalize retail strips, fuel manufacturing companies, and expand professional services firms—all contributing to job growth in the greater Indianapolis area.

For instance, a fund investment in RKU Standard, a family-owned manufacturing business that has operated on the city’s East Side for more than six decades, allows the 70-year-old owner to retire while also keeping the business in the community. The existing chief operating officer is purchasing the company with support from Grow Indy II, avoiding a sale that would relocate the firm out of state and preserving 63 local jobs, while also supporting plans for additional hiring to support growth.

Partners and Investors

The City of Indianapolis formed the Indianapolis Redevelopment CDE in 2009 to administer its New Markets Tax Credit (NMTC) program and support transformative projects that address blight, high unemployment, and poverty in distressed neighborhoods. It tapped Broadstreet to manage all aspects of Grow Indy Fund II, including other partners in the effort.

Cambridge Capital Management Corporation is serving as originator, underwriter, and asset manager for the fund. First Merchants Bank is participating as the senior leverage lender, and U.S. Bancorp Community Development Corporation is the NMTC investor.