John Hamilton

What difference could Slow Money make?

By John Hamilton

The Slow Money movement has the potential to bring diverse investment worlds  together in a way that benefits lenders and borrowers alike.

I recently wrote about my interpretation of Slow Money and how a deliberate examination of your investments might yield some revealing new directions.

Soon afterward, I found myself asking the "so what" question: What difference would this examination make?

I actually believe that this additional introspection has the potential to bring diverse worlds (investment worlds, not planets, though some investors are definitely from Venus and some from Mars...) together in a way that benefits lenders and borrowers.

For example, economic development lenders might broaden their range of interest rates and/or capture some upside when their portfolio businesses do particularly well. This approach would create more risk-tolerant capital that relies on the profit generated by a company's success, not governmental subsidies, to offset losses.

Or it may produce business lenders who take a more-philanthropic approach, recognizing that subsidies can help deliver capital to hard-to-lend markets like small businesses and microenterprises.

This diversity among and within lenders may offer different solutions at different stages of a business's evolution. For example, a business may need philanthropic (subsidized) equity in its early years, before it breaks even. As it matures, it may look for risk-reward balanced capital from a combination of bank and investors seeking to grow their markets and add value.

Have you experienced a lender/borrower that embodied a thoughtful and "slower" approach to money transactions? Did that approach make a difference? If so, please leave a comment. I'd love to hear about it.

John Hamilton is the Community Loan Fund's Vice President of Economic Opportunity and Vested for Growth's Managing Director.