Loan Programs
CDFI Funding Needs Your Help
Last newsletter we were uncertain where the President stands on the CDFI Fund. Now we know. His budget proposes to zero it out.
OFN is leading members and other CDFI champions in a campaign to educate a new Congress about the CDFI industry. Using #CDFIsInvest, they will shine a spotlight on the various ways CDFIs invest in communities and individuals and will urge Congress to support $250 million in CDFI Fund funding for both FY17 and FY18.
The CDFI Fund needs your help. Please write a letter to your Congress people and visit them if you can!
Find contact information for your representative and Senators Diane Feinstein and Kamala Harris by clicking on the links.
Here are some resources to help you:
- CAMEO's FY18 appropriations request for SBA and CDFI programs to use as a template or a leave behind if you schedule a visit.
- The "Recess Packet" that includes some tips and talking points that support microbusiness.
- A bipartisan letter sent by Representatives Steve Knight and Stephanie Murphy that support the SBA's Entrepreneurial Development and Capital Access Programs. You should print this out and leave it behind when you visit.
CalCAP Update: SB 551 and Stakeholder Meeting
The California Pollution Control Financing Authority (CPCFA) is proposing changes to the CalCAP program. CAMEO member lenders discussed these changes in a call in December.
Opportunity Fund's analysis indicates that the changes would have profound impact on how the program works and how participating lenders would be affected. The changes are also being applied to all of CPCFA's programs such as the ADA program and the seismic saftey program. For more information email Heidi Pickman.
Senator Ben Hueso of San Diego introduced SB 551 (Hueso), sponsored by Opportunity Fund to ensure the sustainability of the CalCAP program.
On April 5, SB 551 (Hueso) passed the Senate Banking Committee with all 'aye' votes and no formal opposition. Claudia testified in support of the bill alongside Eric Weaver, Opportunity Fund's CEO. Robert Villarreal and Kurt Chillcott of CDC Small Business Finance also attended and supported the bill during the public comments. It will be heard in Senate Appropriations on May 1, 2017.
Please join us in supporting SB 551. Support letters and other information are on our blog post – "Capital Access Loan Program for Small Business."Reinstating COIN with AB 778 (Caballero)
Last year, Governor Brown vetoed a re-authorization of the COIN program that gave a tax credit for investments in communities that created jobs; financed affordable housing and renewable energy projects; and (most importantly for our purposes!) provided capital for small business owners. He indicated that the extension should be handled in the budget process. California CDFIs will need COIN investments more than ever, given threatened elimination of the CDFI Fund.
Two things need to happen. COIN needs to be extended and it needs to be included in the budget.
A). AB 778 (Caballero) would extend the COIN tax credit program until January 1, 2022 and is moving through the legislative process. Read the AB 778 COIN Fact Sheet to learn more. Then send a letter of support to Reggie Fair of Assemblymember Caballero’s office and cc me.
B) Funding for the extension must be included in the 2017-2018 budget or , the COIN CDFI Tax Credit Program will die. The budget is set to be approved on June 15, 2017, so now is the time to let Speaker Rendon and Budget Chair Ting hear from all of us. You can become a signatory of this letter to Speaker Rendon and Budget Chair Ting. Please send Scott Berman of Capital Impact an email ASAP indicating that you want your CDFI to be included among the signatories and include your logo.MMS Success Story – Black Bark BBQ
David Lawrence and Monetta White are longtime residents of the neighborhood and own nearby 1300 Fillmore. They dreamt of bringing barbecue back to the Fillmore District. On January 12, 2016, their dream came true with the grand opening of Black Bark BBQ. Working Solutions CEO Emily Gasner spoke at the opening, describing their $50,000 loan to Black Bark for finishing touches on their kitchen through the City of San Francisco's Revolving Loan Fund.
"It was no easy road" to get the restaurant open, said Monetta during the celebration. The combined work of the City of San Francisco's Office of Economic & Workforce Development, the Fillmore Center, and community partners like SF Shines, Urban Solutions, and Working Solutions came together to help make Black Bark a reality.
The collaboration is paying off for the community. With the help of Mo'Magic, David and Monetta have hired half of their employees from the Western Addition. The restaurant employs 24 Bay Area residents, and has been named a Working Solutions 2017 Invest in Dreams Inspire Award Winner for outstanding job creation in the community.
Working Solutions used the MMS system to evaluate the business before approving their loan, and are proud to report that Black Bark is paying back right on time while growing their business
Contact Susan Brown if you're interested in learning more about how you can increase capital access in your community through CAMEO's MMS program. MMS, licensed through LiftFund, provides instant risk assessment and fast, quality underwriting to support microlenders in scaling up and maintaining strong portfolio performance.
Research: Small Business Credit Survey
The 12 Federal Reserve Banks issued the 2016 Small Business Credit Survey: Report on Employer Firms, which examines the results of an annual survey of business conditions and the credit environment faced by small business owners who have full- or part-time employees.Many small businesses with employees were profitable and optimistic in 2016, but a significant majority faced financial challenges, experienced funding gaps, and relied on personal finances.
Research: Expanding Employer-Based Small Dollar Loan Programs
OFN recently released "Expanding Employer-Based Small Dollar Loan Programs and the CDFI Industry: Learnings from the Knowledge Network."
The report shares the lessons learned from nine diverse mission-driven lenders that offer employer-based small dollar loan products.
A few key lessons that emerged are:
- Marketing and outreach and trying to match the speed with which predatory lenders make decisions are two main challenges.
- Financial counseling would benefit many clients, but it's hard to encourage them to take advantage of the opportunities.
- Partnerships are critical.
News
- Lending money to pot businesses is a high-risk move: 'This is not for the faint of heart'.
- How To Close The Black Business Credit Gap (hint, put money in a black bank.).
- Kabbage has $500 million to lend to small businesses.
- Karen Mills writes about what Washington can do to help small businesses in The Hill including protecting small business borrowers and simplifying capital requirements for community banks.
- Predatory Finance Watch: Renting a Dog (ouch).
- Opportunity Finance Network is now an endorser of the Borrowers' Bill of Rights and encourages CDFIs to consider becoming signatories.