A new report released by the Treasury Department further proves what many of us already know: CDFIs provide financial services to the most underserved communities across this country. According to an article published in the American Banker about the report, clear evidence exists for continuation of the Bank Enterprise Award Program (BEA Program) which provides monetary awards to banks demonstrating an increase investments in areas where residences live below the poverty level and experience high unemployment. Often the awardees success is based on CDFI investments. Reinvestment of the award money is requirement, and the money can be used to offset the risk or meet capital ratio standards in order for the bank to continue providing funds to these underserved areas.
All federal funding for CDFI programs was zeroed out in the President’s FY2017 and FY2018 budgets. However, strong support for CDFIs and the federal programs supporting these institutions exist throughout the financial services community as well as on Capitol Hill. Mirador is a proud partner of 3+ CDFIs assisting in the distribution of millions in capital to underserved areas around the United States. Through our network of lenders, small businesses seeking capital, who are too risky for a regulated bank or credit union to provide credit, can easily transfer their application information seamlessly to a participating CDFI. These small businesses may be looking to refinance an existing debt with poor terms and high interest. Refinancing through a CDFI can save as much as $6300 a month for a small business with a short term loan with high interest and fees. As the growth engines of our economy, access to affordable capital is crucial to the survival and growth of our job-creating small businesses. Continued funding for CDFI programs is a way the government can help.