When a government program involving small business, job creation and even startups has a 700% funding boost dangled in front of it, you might want to take note. Community Development Financial 
Institutions (CDFIs), which focus on lending in low-wealth, low-income communities, could see an eight-fold increase in funding over the next two years through a combination of stimulus law money and the Obama Administration’s budget plan.
There are about 1,000 CDFIs nationwide. They operate in every state, including DC, and serve both rural and urban communities. During the Bush Administration, CDFI support was halved. Now it’s taking off.
CDFIs leverage the federal dollars they receive by raising additional private sector money, and combine the two sources to support their community lending efforts. Initial funding comes from a little known Treasury Department unit called the CDFI Fund which awards cash to individual CDFIs through a competitive application process.
The path may be a bit convoluted — helping explain the CDFI program’s obscurity — but the result is clear: Millions of fresh dollars, many in micro loans for startups, will be available to new and existing businesses in underserved areas. So while CDFIs aren’t likely to be a topic of discussion at a Starbucks in Silicon Valley, they have already proved themselves vital to non-mainstream entrepreneurs in all corners of the USA.
How to Find the Money: To help you locate a CDFI in your city, state or region, follow this What Works for Business link to a list of CDFIs by state and city. You can download it as a PDF.
Here are just a few examples from among hundreds nationwide:
The Utah Microenterprise Loan Fund, a certified CDFI, is now making loans of up to $25,000. Their motto is ”Building brighter futures through small business.” A $10,000 micro enterprise loan from the Utah fund helped Somer Gardiner yet her Salt Lake city yarn store, Soul Spun Yarn off the ground.
Don Hasch, owner of Hazelbaker Recreational Services in Layton, PA, was able to expand his business with a $92,000 loan from The Progress Fund, a CDFI serving southwestern Pennsylvania. The Progress Fund money was keystone of a total $250,000 financing package for the small business.
Enterprise Corporation of the Delta, in Jackson, MI, has helped train or fund thousands of entrepreneurs in the Mississippi Delta region it serves. It helped back Computers, Inc., a small business owned by three women that installs customer equipment for schools and businesses.
Self-Help, a CDFI in North Carolina, provides small business loans in several southeastern states and elsewhere around the country. Loans range from a few thousand dollars, to several million, to start, buy or expand a business or nonprofit.
The Community Development Venture Capital (CDVC) Alliance is a subset of individual CDFIs that focus on making VC-style equity investments in businesses that are located in “underinvested” markets. Check out their list of Community Development Venture Funds in the U.S. and around the world.
The U.S. Treasury’s Community Development Financial Institutions Fund website also has information on how the program works.
A great source for additional information on CDFIs is the CDFI Coalition, which represents about 800 of the nation’s 1,000 CDFIs. The group’s CDFI State Locator page has links and lists.
Related posts
Share this post on: 
|
Get the What Works RSS feed
Thanks for posting all this great info about CDFI’s, Daniel. The CDFI success stories on the Coalition of CDFI’s website are inspiring and motivating to read.
A much needed article. Good resources for small business owners. I’d like to share one more resource that’s often overlooked by small business owners, especially “work-at-homers”, and that is the SBA’s Express Loan program.
Actually, there are two such programs, one for Veterans and those who are “transitioning” out of the military, including their spouses, and one for “civilians”. People can – with “relatively” little time or trouble – qualify for and receive up to $10,000 to start-up a new business, or up to $25,000 to expand an existing business.
It’s definitely worth looking into – and if people would like to pre-qualify themselves online and be notified instantaneously how much they qualify for, they’re welcome to use the link in my signature line.
Good luck,
Richard Bowen
http://www.unbankablecommercialloans.com/small-unsecured-business-loans