When a government program involving small business, job creation and startups has the potential for a 700 percent funding boost 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 plus Washington, D.C., 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 U.S. 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 microloans for startups – will be available to new and existing businesses in underserved areas.
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. Visit www.cdfi.org.
Here are just a few examples from among hundreds nationwide:
• The PPEP Microbusiness and Housing Development Corp. is a CDFI that has helped fund microbusinesses in rural Arizona. Irma Correa and her daughter Anna Correa received a $5,000 microloan to open Irma’s Floral and Gift Shop in San Luis, Ariz. Today she has a location in a business mall and is the only flower shop in the community that handles Internet orders.
• 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 set her Salt Lake City yarn store, Soul Spun Yarn, off the ground.
• Enterprise Corporation of the Delta, in Jackson, Miss., 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.
The U.S. Treasury Department’s Community Development Financial Institutions Fund Web site has detailed information on how the program works. Visit wwww.cdfifund.gov. The site also has a list of CDFIs by city and state that you can download as a PDF. •
Daniel Kehrer can be reached at ?editor@business.com.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
