Capital Good Fund receives $1.3M federal grant

CAPITAL GOOD FUND announced on Thursday it has been awarded a $1.3 million grant from the U.S. Treasury.

PROVIDENCE – A Providence-based nonprofit that offers loans to low-income families will benefit from a $1.3 million injection of federal funding, it announced on Thursday.

The $1.28 million grant for Capital Good Fund comes from the U.S. Treasury’s Rapid Response Program, as part of $1.25 billion in funds awarded to 863 community development financial institutions across the country.

Capital Good Fund said in a statement it will use the money to help serve low-income families through its array of lower-interest loan programs. Capital Good Fund offers loans for a range of emergency situations and expenses, including costs related to COVID-19, immigration, security deposits, car repairs, technology purchases and energy-efficiency upgrades for their homes.

“The funds will primarily be used as a loan loss reserve, which we will leverage to serve thousands of families with our crisis relief, immigration, and other personal loan products,” Capital Good Fund CEO and Founder, Andy Posner, said in a statement. “We’re deeply grateful for the award, as it will enable us to achieve our strategic goals in making a larger impact across the country.”

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Capital Good Fund was founded in 2009 in Providence, and has since expanded to offer its loans and financial education services to seven states. It also recently launched an emergency financial coaching hotline.

It was founded to provide alternatives to predatory lenders, which in Rhode Island can charge up to 261% interest on their loans. Lawmakers have considered but not yet passed reforms on payday lending in the state, which is one of only two in the Northeast without limits on payday lenders, according to the Economic Progress Institute. 

Treasury Secretary Janet Yellen also stressed the role of CDFIs in helping people and communities that have been underserved by traditional financial institutions.

“In serving places that the financial sector historically hasn’t served well, CDFIs lift our whole economy up. We know that for every dollar injected into a CDFI, it catalyzes eight more dollars in private-sector investment, meaning that today’s announcement might lead to an additional $10 billion in investment,” Yellen said in a statement.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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