Description
The State Small Business Credit Initiative (SSBCI) is a $10 billion federal investment that enables states to craft programs that expand small business financing. SSBCi includes strong incentives to reach socially and economically disadvantaged business owners, and community development financial institutions (CDFIs)are a critical vehicle for reaching those businesses.
These briefs provide recommendations on how SSBCI administrators, at the jurisdiction level, may be able to increase collaboration with CDFIs with the goal to increase small business loans of under $100,000 to socially and economically disadvantaged individuals. The Aspen Institute and Scale Link, as part of their work with the Initiative for Inclusive Entrepreneurship, have reviewed current SSBCI offerings and how they intersect with the work of high-volume CDFI small business lenders. Recommendations are provided for three separate SSBCI product solutions: capital access programs, loan guarantee programs, and loan participation programs.
These briefs are available here in a single document, or the individual design briefs can be downloaded individually via the links below:
- Solutions for Loans up to $100,000: Capital Access Program (CAP) Optimal Design
- Solutions for Loans up to $100,000: Loan Guarantee Program Optimal Design
- Solutions for Loans up to $100,000: Loan Participation Program Optimal Design
Participation in these new capital tools has both mission and financial implications for the CDFI, and decisions about whether and how to engage are complex to navigate. To assist CDFIs in making these choices, Scale Link and the Business Ownership Initiative have created this decision guide and financial modeling tool. It can be useful in making an initial decision on whether (or how much) to participate in a particular program or fund — or in assessing how to negotiate with a private or public funder about the parameters and economics of the program. This resource can also help CDFIs reassess the extent of their participation as they learn more over time about the financial and mission implications of a particular program.
About
The Business Ownership Initiative at the Aspen Institute is an initiative of the Institute’s Economic Opportunities Program (EOP), which advances promising strategies, policies, and ideas to help low- and moderate-income Americans connect to and thrive in a changing economy.
Scale Link created and manages an innovative secondary market for microloans from community development financial institutions (CDFIs).
