Non-profit lenders are combining operations to increase economic impact in the Delaware Valley
Community First Fund and FINANTA will merge to become the second largest Community Development Financial Institution (CDFI) in the region.
As the coronavirus pandemic has significantly hurt the economy, two prominent non-profit lenders are merging to help mitigate some of its negative impact.
Community First Fund and FINANTA recently announced plans to combine their operations, creating one of the largest Community Development Financial Institutions in the Delaware Valley region, with more than $100 million in total assets.
The announcement comes shortly after a $15 million collaborative funding in the Paycheck Protection Program (PPP) loans - designed to provide a direct incentive for small businesses to keep their workers on payroll - for 172 businesses in the region.
“We really started working together because a lot of the PPP loans were not getting to historically disadvantaged businesses, and Latino and immigrant business owners, in particular,” said Daniel Betancourt, president & CEO of Community First Fund.
According to the Center for Responsible Lending, the PPP loans can only be accessed through banks and other existing SBA lenders and to existing customers. While most business owners of color don’t have those relationships, the likelihood to receive the loans is substantially lower.
With businesses of color accounting for more than 30% of all businesses in the U.S., contributing more than 7 million jobs and over $1.38 trillion in revenue to the economy, the need to keep them afloat is paramount.
Community First Fund is certified by the SBA to help provide loan help for small business owners of color, while FINANTA complements the effort by providing the technical assistance in helping those businesses access needed capital.
“What we have done is make sure that our customers get the help they need to submit the applications and document the applications,” said Luis Mora, president of FINANTA.
This merger is a continuation of nearly three years of the organizations working together on different projects such as the Kensington Lending Program, which has helped revitalize the Kensington corridor and surrounding community.
It will allow both organizations to focus on their shared mission of providing capital access to those who are most in need, as each organization predominantly serves entrepreneurs of color, who have been disproportionately impacted by the pandemic.
“Together, we are becoming a much more financially robust organization,” said Mora.
The merge will officially go into effect on July 1, 2020 and operate under the name Community First Fund with Betancourt remaining the president & CEO.