FOR 14 years, Cowgirl Creamery in San Francisco has been making award-winning organic cheeses and growing - to more than $8 million in sales last year. Yet no bank had ever actively sought its business until New Resource Bank came calling.
"A bank has never been excited about us," said Sue Conley, a co-founder of the creamery, which is based in Petaluma, Calif. "Banks just haven't understood what we're doing or how it might be successful. We were really taken aback when New Resource said they'd like to work with us."
New Resource opened in San Francisco in 2006 with the theory that helping green businesses like Cowgirl Creamery would be good for its own bottom line. Peter Liu, the founder of New Resource, had worked as a vice president at Credit Suisse First Boston and at Chase Manhattan Bank, but he was also an environmentalist who saw sustainability as a long-term trend.
"Green is going to evolve from a social movement to a market opportunity," Mr. Liu said. "There will be real opportunities for new businesses, new technologies, new products and new services that are demanded by consumers."
Mr. Liu also wanted to hark back to the days of community banking, when a small-town banker could offer high-touch service. With New Resource, that community is the world of solar entrepreneurs, organic farmers and green technology start-ups in Silicon Valley.
New Resource, which operates like other federally insured banks, offers customers financial incentives for green building projects. It has also created loans for homeowners that enable them to install solar systems with no money down.
New Resource is not only financing a $1.2 million solar project for Veritable Vegetable, a mostly organic produce distributor in San Francisco, but also connected the company with another client, Borrego Solar Systems, which will install the panels on its facility.
"We're a customer of New Resource because we know New Resource is specializing in companies that are environmentally committed," said Bu Nygrens, an owner of Veritable Vegetable. "We feel like for the first time in our 34-year history, we actually have a personal relationship with the people we're banking with."
Veritable Vegetable not only abandoned Bank of America after 32 years to put its money in New Resource, but it also became an investor in the bank. So many people wanted to invest in it that the bank gave some money back to investors.
"We just wanted to be disciplined in our growth and not overdilute our valuation," Mr. Liu said. In its first 17 months in business, New Resource has amassed more than $180 million in assets.
New Resource has its own green credentials: its offices in San Francisco have a "gold" rating in the Green Building Council's Leadership in Energy and Environmental Design system.
Born in Taiwan, Mr. Liu immigrated to Los Angeles with his family when he was 12 and eventually earned a degree in chemical engineering and material science from the University of California, Berkeley. He worked at the Chevron Corporation, designing production units for refineries. At Chevron, he had his environmental awakening.
He wound up at the California Air Resources Board, helping establish rules and watching his former industrial colleagues squawk. "Having been on both sides, I learned that when you set a standard, companies figure out how to reach it," he said.
He decided to re-enter the business world and enrolled in the public policy program at the Woodrow Wilson School of Public and International Affairs at Princeton. He then went into international banking during his stints at Chase and Credit Suisse.
He moved back to California and wound up at Environmental Entrepreneurs, a business network. He worked with Bob Epstein, a co-founder of that group who had also started the database company Sybase and other technology businesses, and the two hatched the idea for a green bank.
"What's the banking relationship that green businesses are looking for?" Mr. Epstein asked. "We did a lot of research and found that that was an unmet demand."
So when Cowgirl Creamery was ready to borrow money from Bank of America to build a cheese-making operation to increase production and improve quality, New Resource matched the offer with an 8 percent loan for $1.3 million.
"We're not here just to fulfill a social mission," Mr. Liu said. "We're here to build a great business."