Farewell Aura, Your Mission Endures

As the most unprecedented year to date has now come to a close, I continue to reflect on the global impact that the pandemic, recent legislation, and status quo have elicited. While the race for inclusivity and equality surges forward with renewed promise in 2021, the last year has certainly claimed various initiatives, small businesses, and companies dedicated to fulfilling this important cause. With a heavy heart, I write to inform you that Aura, a certified Community Development Financial Institution (CDFI) and fintech innovator serving those without credit or voice, has succumbed to a similar fate that has met countless businesses throughout the previous year. After eight years of championing the traditionally underbanked population, sadly, Aura has closed.

In 2012, I founded Aura to bring economic justice to minorities, Latinos, and low-income families who have been traditionally underbanked, and underrepresented in the financial realm. Without access to liquidity and financial tools, these individuals were limited or denied the financial mobility that comes with having a good credit score and an established credit history. As a Latino entrepreneur, I recognized the transformative power of inclusivity, opportunity, and mobility, and set forth to provide those services for the underbanked community through the function of Aura.

To all of Aura’s employees, and those who believed so much in Aura’s mission and shared goals, I thank you for your commitment, creativity, and tireless work to make Aura’s promise a reality for so many. Your noble efforts led to providing nearly $700 million of responsible loans to over 350,000 hard-working customers who, as a result of your work, have had the opportunity to build their credit scores. Using technology, we created a new method of crowd-funding over $500 million of our loans through 25+ micro-securitizations made possible by the Jobs Act and extended the ability for underserved families to seek financing at over 900 local, trusted businesses through California, Arizona, Texas, and Illinois.

We also helped to pass new laws in California and Virginia to increase access to affordable capital and to curb predatory lending to vulnerable populations. Altogether, Aura’s loans saved our customers more than $500 million by avoiding payday and predatory lenders, and improved credit scores for 71% of repeat borrowers. As a company, Aura blossomed from inception to $100 million in revenue in just seven years. Although overall profitability still remained elusive, we made great strides, most importantly, in proving that our borrowers are indeed worthy of fair and affordable loans. As Aura’s CEO for many years, I’m deeply saddened for how things ended, but I know that we left everything on the field. To all of those who were a part of Aura’s journey, be proud, stand tall, and remember that Aura’s mission continues.

Indeed, making the math work on small, credit-building loans with interest rates below 36% is a major challenge, but one that America must solve. How else will millions of low-income, largely minority workers earn enough credit to buy a home or finance their small business? How else will communities of color build wealth without that first step? Aura figured out how to lower the costs of reaching into low-income communities and credit risk through technology, but it wasn’t enough. Capital and scale also matter. If America wants to truly solve its never-ending wealth gap, the government must create tax and other incentives for the private sector to invest billions in CDFIs like Aura, and build the infrastructure necessary to make capital widely available to communities of color.

When the pandemic first hit, Aura was on the verge of closing new financing on its final march to profitability. However, suddenly, all capital dried up as the uncertainty of how our low-income, mostly Latino customer base would recover from a pandemic that disproportionately impacted their jobs, health, and finances intimidated investors. As a board member of Aura over these last difficult months, I worked closely with our CEO and key executives to navigate the next steps for the company, including a strategic sale. It is an understatement to say that I am disappointed and heartbroken by this turn of events, after founding a company that I and many others nurtured for so many years.

Aura and its employees worked tirelessly in 2020 to find a path forward, including merger opportunities, though unfortunately, time and circumstances were not on our side. Tragically, our story in 2020 is not unlike many others, particularly in low-income communities, and is ultimately the result of the disruption, discord, and uncertainty stemming from the global COVID-19 pandemic. While borrowers continued to perform well throughout 2020, a feat I was personally proud of, the unprecedented circumstances were too difficult to overcome. Even great teams, plans, and execution were not enough.

I am incredibly grateful to everyone whom I have worked alongside. I would like to extend my deepest gratitude to all of Aura’s employees, investors, lenders, partners, and the countless consumers who have driven forward the crusade for inclusive lending. I’m incredibly proud of everything that the team at Aura has accomplished. The mission of the company shall continue to surge onwards, and our shared pain for Aura’s final chapter will be the source of new visions and directions.

As income inequality continues to create undeniable barriers between the seemingly wealthy and the poor, I remain committed to leveraging my own experiences to foster change. Corporate responsibility remains a very viable source of change, and I believe in harnessing momentum to spearhead inclusivity and opportunity within the technology and financial services sectors. Simultaneously, I remain motivated by the notion of tailoring products specifically to aid the traditionally marginalized and underbanked communities. I aim to continue to provide these communities with the tools needed to build wealth, and to have a real opportunity at achieving the “American Dream.” As we move forward in the future, especially for Latinos, it is important to have venture capital participation that is actually understanding and caring of our communities, not just the growth potential.

On a personal note, although I lost our company, I’ve made peace with letting go and found my power in my family, spirituality, and truth. No matter where my professional journey takes me next, I will carry the mission captured by Aura in my next adventure. I remain wholly committed to addressing income inequality, and access to capital for the underbanked.

I will be forever grateful to every individual who believed in Aura’s core values, and who worked tirelessly to provide others with opportunity, liquidity, and a path forward. Like many other Americans, I am hopeful that the new year will bring the changes that are now so vividly on the horizon. I remain graciously optimistic that together, we can create tangible and systemic change.

With Love and Hope,

James Gutierrez

#fintech #altlending #CDFI #economicjustice #unbanked

Originally published at https://www.linkedin.com.

James Gutierrez is a thought leader, entrepreneur, and CEO with vast experience in the evolving realm of FinTech. Additionally, he is an avid philanthropist.