Blog

Love Letter Fund: An update on Margin Institute

Two Successful Loans Launch Refugee-owned Businesses in Austin
 

 
What do a Halal food truck and tow truck have in common? Yes, they are both trucks, but more importantly, these two local small businesses are the first recipients of loans from the Margin Institute.
Margin Institute was established in 2020 to make small loans to entrepreneurs in underserved communities looking for economic opportunity and financial stability. The goal of the Margin team, led by Covenant members Dan Michel, Dan Pucci and Matt McMichen, is to provide capital, education and support to their lenders as they build sustainable small businesses. 
Margin is one of the first recipients of the Covenant’s Love Letter Fund (LLF). This fund encourages members to explore the flourishing of our city by integrating their work and their faith. Through this initiative, Covenant provides financial support to members and friends with business ideas to make positive change in our city.  The three founders and Austin Christian Fellowship (ACF), a local non-denominational church, have also donated to the Margin Institute.
The Margin leaders met via their Covenant small group. When Michel first heard about the Love Letter Fund, he pondered the connection between his faith, and finance and vocation, wondering what it would mean for someone in his industry. When he took that question to his small group, he discovered that Pucci had been thinking about the same thing. Another member of their small group, Chuck Volk, introduced them to McMichen, a tech executive who had expressed similar interest. 
Covenant named Margin an LLF recipient last spring. Margin’s road to lending has had a few twists. “We are a startup and none of us had done lending in the past. With any new venture, you know you’re gonna have to pivot and learn. You’ll make mistakes,” Michel said. “The important thing is to learn from those as quickly as possible. That’s what we’re doing as we move forward.”



 
Lessons Learned
Michel offered a quick review of Margin’s year. “At first, we were targeting refugees new to the country. At some point, our research showed that a higher percentage of refugees who have been here longer have more success starting their own business. We think the sweet spot is people who have been here over a year. These are people who want to take more control over their finances. They may not have credit history and would struggle to get a loan. If they could get a bank loan, they would get high interest rates.”
The team has learned to connect with the target audience. “We don’t look like the community we are trying to lend to,” Michel said. “Many of these people have been treated poorly and may have some trust issues.” To address that, Margin has hired a women from Turkmenistan recommended by the Covenant mission committee. She is married to a man from Afghanistan and deeply understands how challenging it is to move to a new country. The team is also seeking others to help with that aspect of the business.
Margin gets most of its clients through Refugee Services of Texas (RST). “Refugee Services of Texas is a nonprofit. Their whole purpose is to help immigrants come into the country and get settled. They have been a great resource for us,” Michel said.
The team has also learned that deals can almost close and still break down. Michel said that a few Margin loan applicants have little knowledge about what’s involved in starting a business. "They don’t know what’s required with permits and taxes and things like that,” he said.
In that area, Covenant member Ted Reynolds has lent a hand. “Ted has been a big help, especially with the lending side. He knows the processes and the operational side of lending,” Michel said.
 

 
Trucks: More than Four Wheels in Common
Margin’s first loan recipient may sound familiar. Ghazal, the daughter of Shirin Keshavarz, opened a halal food truck on April 1. Shirin was selected to be the first LLF recipient. However, Shirin tragically died before her business was launched. (Read her story here.) Her daughter, also an entrepreneur, picked up where her mother left off, receiving a Margin loan to open the food truck.
Ghazal learned by helping her mother with her cooking business. It was natural for her to open the food truck, located in downtown Austin.
Juan is the owner of the aforementioned tow truck. RST connected him with Margin. “He came to us and had plans for his business. He’d already done some research and has worked in the industry. The company he has worked for is encouraging him to get his own truck. They have already said that they will hire him as a contractor.,” Michel said.
Dan recalled an early meeting when Margin leaders met with Juan and two RST representatives. “Meeting with Juan, it all sounded good. I thanked RST for making the connection. They said, ‘No, thank you! We’re here to serve the community. This is a great thing you’re doing for these refugees.’”
“This is a rare win-win-win!” Dan reflected, “for us, for Refugee Services and the loan applicant.”
 

 
Margin Moves Forward
Michel retired at the beginning of this year and so has spent more time on the projects than Pucci or McMichen. “It’s not like a 9-to-5 job,” Michel said, using the tow truck loan, expected to close a few days after our interview, as an example. “With the loan closing on Friday, it has been a flurry of activity. Juan doesn’t speak English, so I had to translate several documents. I used Google Translate and RST said the translation wasn’t quite right. There are lots of balls in the air to keep this moving. He needs a DBA [a DBA enables business owners to conduct business under a name different than their own], a checking account, and more…”
Michel said he’s the main guy because the other partners both work full-time. “We have regular calls and exchange texts. I keep them updated. They’re great: great sounding board, and make great suggestions. Margin won’t be successful without them.”
Margin will keep moving forward and figuring out the best ways to provide small loans for entrepreneurs new to our country. With the team’s combined 80+ years of business experience, Michel — a CPA, Pucci — a business development professional, and McMichen — a controller and CPA — will continue to fund those at the margins who would otherwise have a difficult time getting a loan.
“Without our services, many of these people would not have the financial opportunity available to them to begin a business to support their loved ones. Our faith-based lending principles provide low-interest loans … and strong spiritual sustainability for these individuals as they are treated with love and care by Margin Institute, as we ‘walk the walk’ to deliver Christ’s message to the community,” Michel said as they launched Margin.   
And that is a win-win-win by any standards!
 
Sunday Worship Times

Worship In Person
Traditional services at 8:15 and 9:30 a.m.
Contemporary Service at 11:00 a.m.

Worship Online
Sundays at 9:30 a.m. at covenant.org/worshiponline 

Office Hours
Monday through Thursday, 9 a.m. -  6 p.m.
Friday,  9 a.m. - 12:00 p.m.

 

Follow Us
Weekly Newsletter
Join Our Mailing List