Thomas Schumpert Jr. approaches every would-be customer as if it were a big corporation borrowing $100 million. He wants to know everything -- who the business owner's suppliers and creditors are, how often he balances a checkbook, and how cash flow is managed.

Mr. Schumpert's method belies his mission. As head of the Massachusetts Minority Enterprise Investment Corp., the largest loan he has made is for $225,000. His mandate, in fact, is to finance credit-worthy small business in poor communities.

The care that he takes to make such small loans is worth it, Mr. Schumpert says, because his Boston-based consortium lends to business that banks wouldn't touch on their own.

"It's almost like making an equity investment," he said. "We know no bank is going to take us out [buy our loan], so we do more due diligence than any bank."

Not a Charitable Enterprise

Altruism is not his motive -- the bank-owned consortium is a profit-making venture -- and Mr. Schumpert is convinced good customers are available in minority communities.

But he would be the first to admit that the going has been slow. The investment corporation began operating 20 months ago but made no loan for the first 10 months of its life. It has now made 14 loans, totaling $1.2 million, and is committed to an additional 18.

Mr. Schumpert, a former executive at Bank of New England and, more recently, Sun Trust Banks, said the extra care his company takes in making its small loans may seem inefficient but is worth it. All his borrowers, who are either from the Boston area or Springfield, Mass., are current on their payments. Funds for the corporation come from eight Massachusetts banks that have invested $4.3 million in equity. Five of the eight, plus two additional banks, have committed themselves to $21 million in credit lines.

Mr. Schumpert, 51, has a staff of only three, meaning delays are often lengthy between the filing of a loan application and his group's decision. The process now takes 60 days. But without his organization, he said, it's almost certain that his entrepreneurial customers would never have gotten loans.

A Bad Record in Community Reinvestment

Boston's large banks were criticized sharply for their minority lending efforts during the 1980s. When the investment group was formed in December 1990, Mr. Schumpert said, a lot of the criticism remained valid. But he contends that awareness is improving. For example, Bank of Boston Corp. and Shawmut National Corp. have each assigned a loan officer to work full-time with Mr. Schumpert to locate good minority business prospects.

Mr. Schumpert's board meetings also have become forums for spreading the word among Boston's top bankers about minority businesses and their needs. Officers from BayBanks Inc., Bank of Boston, Shawmut, State Street Bank and Trust Co., and Fleet Financial Group, sit on the board. A representative of Boston Bank of Commerce, a minority-controlled institution, also is a director. State Street Bank is a subsidiary of State Street Boston Corp.

Mr. Schumpert said that both borrowers and bankers are at fault for failing to understand each other's needs. He told of a man who has run a Jamaican restaurant in Boston's Roxbury section for eight years. "During that time, he had bought a building and done some rehab to grow the restaurant," Mr. Schumpert said. "But banks had turned him down repeatedly. They said he had no cash flow." However, he just hadn't been recording his cash flow properly.

"If you think about it," Mr. Schumpert said, "a poor person in business for eight years with his business growing can't be failing." His investment group gave the restaurateur a $120,000 loan four months ago on condition he hire a bookkeeper.

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