High risk, high reward Featured

5:50am EDT August 30, 2002

ShoreBank is by no means the biggest bank in Cleveland.

It can't boast that it has given billions of dollars in loans, and branches don't even give away toasters. But what ShoreBank does makes it one of the most innovative financial institutions of its kind.

ShoreBank Corp. has banking, development, for profit and not-for-profit entities under its umbrella. The bank itself specializes in small business financing, but for ShoreBank and its president and CEO Eric Von Hendrix, that's just the beginning.

"We focus on the riskier customers," says Von Hendrix. "Whether it's through our bank (ShoreBank) or ShoreBridge Capital or ShoreGrowth fund, we deal with community development."

ShoreBank is an FDIC bank but is flanked by two capital funds (ShoreBridge and ShoreGrowth) that provide seed and mezzanine financing, as well as a host of other development and entrepreneurial services to Cleveland's inner city residential and business development.

"We have to make money, but at the same time, we are focused on community development," says Von Hendrix.

Churches, childcare and small businesses are at the heart of ShoreBank's mission, and it is through the support of these entities that Von Hendrix hopes to strengthen the community.

"Traditionally, financial institutions have stayed away from financing religious institutions," says Von Hendrix. "The idea is that no one wants to foreclose on God."

But as Von Hendrix points out, churches historically have a low default rate and, like small businesses, banks and schools, they are a big part of the inner city community.

Last year, the bank, that has been in Cleveland since 1994 loaned out $55 million, with loan amounts between $50,000 and $500,000. That may be well below the amount of the larger, better known banks in the area, but as Von Hendrix says, "What we do is unique ... although maybe in a few years it won't seem so unique because I don't think making money and helping the community need to be mutually exclusive."

And it seems that ShoreBank has the support not only of the community but of those other, bigger banks.

"Every large bank in the city has a significant deposit in this bank," says Von Hendrix. "They are not so much our competitors as they are our supporters." How to reach:ShoreBank Cleveland, (216) 681-8901